War will force oil pipeline to avoid Caucasus region

BLACK GOLD: BATTLE FOR THE OIL BILLIONS
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The Independent Online
MOSCOW'S SAVAGE war in Chechnya is making more likely an early deal for a pipeline to carry Caspian oil to the West, bypassing the unstable northern Caucasus region of Russia.

Industry experts say that Turkey, Georgia and Azerbaijan will probably sign an agreement at this month's 54-nation European security summit in Istanbul, for the new pipeline running from the Azeri capital Baku through Georgia and then south-west to Turkey's Mediterranean port of Ceyhan.

The long-envisaged scheme has the strong backing of Washington, which sees it both as a major boost for Ankara, the most important US strategic ally in the region, and as a means of shifting both Georgia and Azerbaijan further from Russia's sphere of influence and into the Western orbit.

But the project has been held up by arguments over financing. Doubts have also long been expressed over whether Caspian output by the BP-Amoco- led consortium, which is due to build the pipeline, was enough to justify the $2.4bn cost, when an existing pipeline from Baku to the Russian Black Sea port of Novorossiysk could be expanded at much less cost.

Now however the financial difficulties have been largely cleared up, and the fighting in Chechnya has cast a long shadow over the Novorossiysk pipeline, which runs directly through the heavily bombarded Chechen capital of Grozny.

In a bid to allay these doubts and head off the Azerbaijan to Turkey route, Moscow has promised to build a new segment of pipeline through the republic of Dagestan, bypassing Chechnya completely. The new link could be ready within six to eight months, giving Russia a much stronger hand in the geo-political jockeying over the vast potential energy riches of the Caspian and Central Asia.

But Chechen insurgents have warned they would sabotage it even before it started operations - a threat not being taken lightly given that it was Chechen incursions into Dagestan last summer that provoked the first instalment of the new conflict.

The US is also leaning hard on Armenia and Azerbaijan to announce a settlement of their 11-year dispute over Nagorno-Karabakh. This too would reduce Russia's scope for meddling in the Caucasus, but last week's murder of the Armenian Prime Minister and other top officials makes it unclear whether it will be signed in Istanbul, as had been hoped.

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