MOSCOW, April 30 (RIA Novosti) Moscow no longer interested in touting its relations with Europe/ Georgia heads for NATO, leaving Abkhazia and South Ossetia behind/ Greece joins South Stream/ Iran may strengthen Gazprom's positions in Europe/ Mitsubishi, PSA Peugeot Citroen to build car plant in Russia
Kommersant
Moscow no longer interested in touting its relations with Europe
Tuesday's meeting of the Russia-EU Council in Luxembourg ended in fiasco. The European Commission was to receive a mandate on the new Russia-EU Partnership and Cooperation Agreement (PCA) talks.
Lithuania vetoed the talks, demanding that the European Union compel Russia to renew oil deliveries to the Mazeikiai refinery, to resolve all pending conflicts and to pay damages to persons who were deported from the invaded Baltic States.
Tuesday's meeting almost exactly followed the two-year-old pattern, except that Moscow's attitude to the new PCA has changed dramatically since then.
In November 2006, before the Russia-EU summit in Helsinki, Poland vetoed the talks, as well. Warsaw was mainly interested in Russia's lifting its ban on Polish meat imports at the moment, but the energy issue also came up.
However, the current situation differs from 2006 in one major aspect. In 2006, the Russian government attached paramount importance to signing the new PCA. Moscow viewed Brussels as its key partner, and successful PCA talks as evidence of progress in EU-Russia relations. Today, the Kremlin no longer deems it important to make a show of its perfect relations with Europe.
Moreover, a successful EU-Russia summit to take place in Khanty-Mansiysk in June may even have adverse consequences: if the PCA talks are finally launched, it would mean that President Dmitry Medvedev managed to do something Vladimir Putin had failed, on his first attempt.
Sources in the European Commission told Kommersant that there was no deadline set for beginning the PCA talks. The old agreement expired in December 2007 and was automatically extended for another year. If the talks are not started this summer, Russia and Europe can still use the obsolete 1994 agreement, although no rapprochement or changes in the visa regime can be expected soon.
RBC Daily
Georgia heads for NATO, leaving Abkhazia and South Ossetia behind
Russian-Georgian tensions over two self-proclaimed republics, Abkhazia and South Ossetia, have reached their all-time peak.
On Tuesday, Moscow accused Tbilisi of planning a military invasion of Abkhazia and announced a reinforcement of its peacekeeping force in the area to 3,000 troops. Georgia responded by describing the move as an act of aggression from Russia.
However, while Georgia may be prepared to literally fight for Abkhazia, the United States seems quite unprepared for such a twist. Russia is trying to use that discrepancy to impede Georgia's accession to NATO.
Analysts say that neither Georgia nor Russia is ready for large-scale hostilities. "With [the new president's] inauguration so near, we have enough on our plates without a war," said Alla Yazkova, head of the Mediterranean and Black Sea Problems Center at the Russian Academy of Sciences' Institute of Europe.
"So far, it is nothing more than muscle-flexing," said German political analyst Alexander Rahr.
"I think the tensions will ease after Russia's talks with the EU and NATO," predicted Georgian analyst Paata Zakareishvili.
With the relations so strained, any small pretext could trigger an armed conflict. But whether the West would want to intervene is still an open question. NATO Spokesman, James Appathurai, denied Georgian media reports that NATO allegedly demanded a pullout of Russian peacekeepers from Abkhazia.
"Whatever NATO's rhetoric, the US is so caught up in Iraq, they cannot even scrape together enough volunteers for Afghanistan," Dr Yazkova said.
Analysts say Western reactions to shooting in Abkhazia will boil down to denying Russia WTO entry and shutting us out of G8.
"Russia is trying to complicate Georgia's accession to NATO," believes Alexander Khramchikhin, head of research at the Institute of Political and Military Analysis think tank. "It is not just the Kremlin's position, but a consensus of Russian society as a whole," agrees Yazkova.
The Kremlin must be thinking that if Georgia's accession to the alliance is unavoidable, Russia would rather it joins up without dragging Abkhazia and South Ossetia with it. At least, Russia will be able to retain its presence on the Black Sea and the South Caucasus this way.
Vedomosti
Greece joins South Stream
Russian energy giant Gazprom has convinced five of the seven countries across which the South Stream gas pipeline is to run to join the project. It now has to agree with Ukraine and Austria, although the exact route of the pipeline has not yet been determined.
South Stream is a Russian-Italian pipeline designed to pump 30 billion cubic meters of Central Asian gas to Europe per year. Serbia and Hungary joined the project, already involving Bulgaria, earlier this year. Greece recently became the fifth participant.
Greek Development Minister Christos Folias and Russian Industry and Energy Minister Viktor Khristenko signed the agreement to set up a joint venture for building the pipeline across Greece on April 29.
Khristenko said Russia would annually deliver 10 billion cubic meters of gas to Greece.
Gazprom CEO Alexei Miller said Russia would fully satisfy Greece's gas requirements, which are expected to double in 10 years.
Greek officials declined to comment.
Valery Nesterov, an analyst at the Troika Dialog investment holding, said Miller and Khristenko's statements were political, because Greece only used 3.2 billion cubic meters of gas in 2006, according to BP. It prefers to receive gas from several sources, notably natural gas from Azerbaijan and LNG from Algeria and other countries.
Greece is unlikely to give up its diversification program and become fully dependent on Russia, Nesterov said.
Although the pipeline's route has not been formalized, it is expected to run from Russia to Bulgaria along the Black Sea bed and then split into two offshoots, one toward Italy across Greece and the Adriatic Sea, and the other toward Hungary and Austria across Serbia.
Gazprom now needs to agree with Austria and Ukraine, because the pipeline is to be built in the Ukrainian economic zone of the Black Sea.
So far, only the future of the offshoot from Bulgaria to Greece seems to be assured, Nesterov said.
The project's main rival, the Nabucco pipeline, provides for the delivery of 25-30 billion cubic meters of Central Asian gas to Austria across Turkey, Bulgaria, Romania and Hungary.
According to Nesterov, Nabucco is a viable project, although Gazprom is trying to claim all of Central Asian gas, because consumption is growing in Europe and the EU supports Nabucco.
Kommersant
Iran may strengthen Gazprom's positions in Europe
The Indian and Pakistani leaders have approved a plan for building the Iran-Pakistan-India (IPI) gas pipeline, which is to be completed in 2012. China may become the fourth partner in this project.
If implemented, the project may pull a considerable share of Iranian gas to the South-Asian market and thus strengthen Gazprom's positions in Europe.
The pipeline will be about 2,700 km (1,678 miles) long; the approximate cost of the project is $7-$7.6 billion. Iran's South Pars field must become the resource base for the gas pipeline.
The pipeline's annual capacity will be about 54 billion cu m of gas, of which 32 billion will go to India and the remaining 22 billion to Pakistan. Initial supplies to each of these countries may reach 10-16.5 billion cu m.
Pakistan's President Pervez Musharraf suggested attracting China to the project. His Iranian counterpart Mahmoud Ahmadinejad supported this proposal, and India did not raise objections.
It is not yet clear how China may participate in the project: the construction of a pipeline leg to China via Pakistan will be very costly (the builders will have to cross the Himalayas), which means that gas supplies will bring no profit. Representatives of the state-controlled China National Petroleum Corporation (CNPC) and Chinese government officials have not commented yet on China's possible participation in the IPI project.
Gazprom has long displayed interest in the project, offering to partially finance the pipeline construction in exchange for a stake in the IPI project.
A year ago, Mikhail Fradkov, Russia's former prime minister, and Alexander Ananenkov, deputy chairman of Gazprom's board, actively lobbied this idea, but recently there has not been any news about the project from Gazprom.
Nevertheless, Moscow believes that the implementation of the IPI project will meet Gazprom's long-term interests: Iran's appearance on the Indian market will mean that large amounts of South Pars gas will not go to Europe.
On April 29, the sides promised that the final agreement would be signed in Tehran in the near future, when the prices of gas supplies and transit are finally agreed upon.
At present, all players have room for maneuver. Sean McCormack, spokesman of the US Department of State, said that Washington is against the IPI project, which means it may start a counter play. The European Union may also hinder the implementation of the project: the EU has long been trying to get Iranian gas in order to reduce its dependence on Gazprom. If the EU offers a better price to Iran, it may think better of it.
Vedomosti
Mitsubishi, PSA Peugeot Citroen to build car plant in Russia
Japanese automotive giant Mitsubishi Motors Corporation and France's PSA Peugeot Citroen have agreed to build a joint car plant in Kaluga, to the southwest of Moscow, a top manager at a car dealership told the paper.
An official helping coordinate the project and a top manager of another car dealer confirmed the reports.
The official said Peugeot Citroen and Mitsubishi had promised to notify Russian authorities in the next few days.
Mitsubishi and Peugeot Citroen spokespersons Tetsuji Inoue and Laurent Cicolella said their companies were studying the possibility of building a plant in Russia together with an unspecified partner, but that no final decision had been made yet.
Mitsubishi CEO Osamu Masuko told the paper a month ago that Peugeot Citroen would become the company's only partner.
The Russian Economic Development and Trade Ministry said Peugeot Citroen would build a $347 million plant with an annual capacity of 60,000 cars by 2012, and that a Mitsubishi plant worth $150 million and turning out 50,000 vehicles per year would also be built.
An official familiar with the investment project said a plant turning out 50,000 cars per year was envisioned.
Cicolella said Peugeot Citroen would assemble medium-size cars in Russia. The manager of a car dealer said the plant would first assemble Mitsubishi Outlander XL and Peugeot 4007 vehicles.
An Economic Development and Trade Ministry official said Mitsubishi and Peugeot Citroen had coordinated production of the Outlander, Peugeot 308 and Citroen C4 models with the ministry, and that the French company had not modified the agreement.
Ivan Bonchev, automotive segment leader with Ernst & Young in Moscow, said Mitsubishi and Peugeot Citroen would profit from the joint program, and that it would take less time to recoup.
He said the plant's first stage would assemble 50,000 cars per year, and that the second stage, due to be commissioned after 2012, would double production.
According to Bonchev, a car plant annually turning out 100,000 vehicles could cost $300 million, and that the sum total did not include the value of car-component production.
He said Peugeot Citroen could add the Peugeot 4007 to the two other models and manufacture it together with the Mitsubishi Outlander XL.
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