Two recent announcements impacting construction of long-planned natural gas pipelines mark potentially important chess moves in the “great game” of energy geopolitics. Most significant is the prospect that Iraq could become a significant gas supplier to European markets. First, in mid-May, Russia’s natural gas monopoly Gazprom and Italy’s ENI agreed to double the capacity of the planned South Stream pipeline. Almost simultaneously, the rival Nabucco project made strides toward securing enough natural gas supplies to finally become a viable project. Nabucco, a project to bring Central Asian and Middle Eastern gas to Europe, has been on the drawing board for seven years. In this latest development, Austria’s OMV and Hungary’s MOL each acquired 10 percent stakes in Pearl Petroleum from United Arab Emirates-based Crescent Petroleum and Dana Gas. Pearl Petroleum, in turn, already is investing $8 billion in two Iraqi natural gas fields located in that country’s Kurdish region that could by 2014 produce more than three billion cubic feet of gas. Pearl intends to extract gas from Khor Mor and Chemchmal, two giant fields in Kurdish Iraq, and pipe it across the Turkish border. From there, the gas would be carried by Nabucco, currently planned for completion by 2015. It has been reported that Nabucco will need about half of this capacity to operate. Heretofore, the higher price Russia was willing to pay for gas from Kazakhstan and Azerbaijan blocked attempts by Nabucco’s European Union (EU) backers to secure supply. Turkmenistan, on the other hand, turned to China as its customer. A study released in early May, “Russia and the Caspian States in the Global Energy Balance,” from the James A. Baker III Institute for Public Policy, Rice University, notes that while Russia holds the largest natural gas reserves in the world it is constrained by its dependence on the European market as its primary customer, limiting its “energy geopolitical reach.” According to the Institute study, the importance of energy to Russia’s international policy cannot be overstated, with “energy relations supplanting communist ideology and the Warsaw Pact as a primary path to a revitalized global role.” In response to Russia’s heavy handed approach, as seen in its feud with Ukraine and war with Georgia, the EU is trying to diversify supply both through alternative pipeline supplies and ship-borne LNG imports, even as “natural gas increases in importance as a primary energy source.” Given the current alignment of players, with Iran, holder of the second-highest gas reserve amounts constrained by international sanctions associated with its nuclear policy, the Baker Institute analysis “reveals that the pace of Iraqi natural gas export capability is the single largest factor affecting Russia’s ability to maintain its dominant position in the European market.” The high prices Russia was willing to pay to lock in long-term gas supplies — as its own reserves decline and to block Nabucco’s access to Central Asian supply — has heightened pressure on its energy sector amidst falling prices, a 40% drop in exports, and the international credit crisis. In its latest move, Gazprom signed the agreement with ENI to boost South Stream’s capacity from 31 bcm to 63 bcm, in a ceremony witnessed by Prime Minister Vladimir Putin of Russia and Italian Prime Minister Silvio Berlusconi. That same day, Gazprom and national gas companies from Bulgaria, Serbia, and Greece signed deals to create joint ventures in those companies to perform feasibility studies and construction for South Stream. The pipeline, which is slated to cost 8.6 billion euros ($11.6 billion) will cross the Black Sea to Bulgaria and potentially have two legs going through Serbia, Hungary, Greece — and likely Slovenia — and ending in Austria and Italy. It also is currently slated for completion in 2015.