Pipeline power

Franz Hubert; Onur Cobanli

We use cooperative game theory to analyze the strategic impact of three controversial pipeline projects. Two of them, Nord Stream and South Stream, allow Russian gas to bypass transit countries, Ukraine and Belarus. Nord Stream's strategic value turns out to be huge, justifying the high investment cost for Germany and Russia. The additional leverage obtained through South Stream, in contrast, appears small. The third project, Nabucco, aims at diversifying Europe's gas imports by accessing producers in Middle East and Central Asia. The project has a large potential to curtail Russia's power, but the benefits accrue mainly to Turkey, while the gains for the EU are negligible.

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Year of publication:	2012
Authors:	Hubert, Franz ; Cobanli, Onur
Publisher:	Vienna : FIW - Research Centre International Economics
Subject:	bargaining power \| transport network \| natural gas \| Nabucco-Pipeline-Projekt \| Nord-Stream (Ostseepipeline) \| South-Stream \| Erdgas \| Natural gas \| Gasversorgung \| Gas supply \| Erdgaspolitik \| Natural gas policy \| Kooperatives Spiel \| Cooperative game \| Russland \| Russia \| Westeuropa \| Western Europe