Negotiation Game - ESS405 EU External Energy Policy
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Negotiation Game
Cesouria – Rostania Pipeline
General Context
The Cesouria – Rostania Natural Gas Pipeline represents the long-term efforts of
four neighbouring countries to manage their gas supply and demand.
Box 1: Map of the Region
These four countries are served by existing line, the CSVR Pipeline. This pipeline
was finished 5 years ago in a rare example of successful multilateral negotiation
in the region. Now, expanding economies and a boom in production have led to
the economic conditions that would support an expansion of this line.
Despite the probable mutual benefits, however, negotiations have been difficult
because these four neighbours have historically had strained political and
security relationships. As a result, even though the expansion project is of a crucial
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importance to all stakeholders, its actual take-off has been long contested,
interrupted and largely postponed.
The original CSVR Pipeline was composed of three parallel lines of pipe (hereafter
called CSVR 1-3, to differentiate between them and planned CSVR expansions)
allowing for the total export of 45 billion cubic meters (bcm) of natural gas per
year, along an approximately 2,800-kilometer long line from Cesouria through
Stetonia, Veronia and terminating in Rostania.
The Project has been operated by a special purpose consortium company
(SPCC) called the Cesouria-Rostania Gas Pipeline Project Consortium, or the CPC.
A full breakdown of the CPC and other Articles defining ORSP 1-3 can be found
in the original Intergovernmental Agreement that was signed in 2009.
Today, times are fairly good in both Cesouria and Rostania, the two ‘ends’ of the
line.
Rostania has been on a 20+ year streak of mostly positive growth, boasting the
best development and infrastructure in the region. It has high hopes for the future,
but needs ever increasing amounts of resources to fuel this growth.
Cesouria has an extensive resource base and has the spare production capacity
to easily fulfil Rostania’s needs. Furthermore, it needs whatever additional
revenues it can get to mitigate an aging, dwindling population and some
stubbornly resistant institutionalised corruption problems.
Stetonia and Veronia have unfortunately been left out of the bulk of economic
development attained by their neighbours. Both are growing slowly, and need
additional gas imports themselves, but not as urgently as Rostania.
Veronia and Rostania are members of the European Union.
Stetonia and Veronia have ongoing issues with stability. Veronia in particular is
facing a revolt in its eastern region, Booker. Regional self-established
‘governments’ are demanding wide-ranging autonomy, and their militias have
taken over police stations and government buildings.
Commentators and Veronian leaks point at arms and people from Cesouria
spilling across the border to fuel this conflict, and the issue threatens the entire
project and thus the economic potential of the whole region.
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Objectives of the project are:
o Security of additional natural gas for consumers, and demand for a
supplier;
o Economic (major investment for the economies of the countries concerned
and stronger integration of markets);
o Political (promotion of cohesion among the countries concerned);
o Ideological (promote and strengthen historical and ties in the region,
overcome regional instability).
Potential and most salient threats to the project are:
o The current low-level conflict in eastern Veronia;
o Ongoing regional insecurity and low stability enforcement;
o High costs of the pipeline due to required security measures.