Pipeline Deal Won't Give Russia a Monopoly
Pipeline Deal Won't Give Russia a Monopoly
An agreement to build a new gas pipeline along the Caspian shore will strengthen Russia’s hold over the Central Asian energy market but will not give it an all-out monopoly over exports, say NBCentralAsia analysts.
At an energy summit in held in the western Turkmen port of Turkmenbashi on May 12, the presidents of Turkmenistan, Kazakstan and Russia agreed to build a pipeline with a 30 billion cubic metre per year capacity. It will take Turkmen gas north through Kazakstan to Russia
The trilateral agreement, together with a complete feasibility study, will be signed in early September. The cost of the project is put at one billion US dollars
Also on May 12, an informal energy summit was held in Krakow, where the presidents of Ukraine, Azerbaijan, Georgia, Lithuania and Poland discussed how to overcome their dependency on Russia as a conduit for energy. An agreement was reached to build an additional section of the pipeline which currently runs from Odessa on Ukraine’s Black Sea coast to the town of Brody, so that it extends to the Polish town of Plock, enabling further transit to Gdansk on the Baltic.
Kazakstan’s president Nursultan Nazarbaev did not attend the Krakow meeting.
NBCentralAsia analysts say the Caspian pipeline agreement undoubtedly strengthens Russia’s energy position in Central Asia, placing a question-mark over an alternative plan, backed by the European Union, to lay a gas pipeline across the Caspian Sea, thus bypassing Russia. At the same time, they say, it does not mean Russia will gain a total monopoly over the region’s energy exports.
Rovshan Ibrahimov, head of international relations at Qafqaz University in Baku, says there are already quite a lot of alternative projects to export Central Asian gas and oil. The Baku-Tbilisi-Ceyhan oil pipeline is already up and running, and routes to China, Europe and India are also being discussed.
“Ultimate control is out of the question; Russia is just trying to secure the supplies which Turkmenistan has promised it,” said Ibrahimov.
Kazakstan-based political scientist Maksim Kaznacheev says that although the EU will now find it more difficult to achieve a diversification of Central Asian export routes, it could still help increase Turkmen and Kazak gas production by investing in new deposits and promoting a settlement on the legal status of the Caspian Sea.
“Russia has strengthened control over Central Asian hydrocarbons for the medium term, but western players have a chance to gain control over supplementary hydrocarbon production in the long term,” he said.
Total gas reserves in Turkmenistan are estimated at nine trillion cu m, and at three trillion in Kazakstan.
Both countries plan to more than double the volume of natural gas they extract for export, but the existing Central Asia-Centre pipeline that goes to Russia can only take 60 billion cu m a year. More capacity is needed if exports are to rise, so the new Caspian shore route makes economic sense.
NBCentralAsia analyst Eduard Poletaev says that before Russia enters into fresh talks with the EU on the Energy Charter, it wants to ensure it has the energy-rich Central Asian countries behind it.
It is apparent from the latest trilateral pipeline agreement that the major exporters in the region will coordinate their export policies with Moscow.
“There is now a greater likelihood that the Kremlin will block the EU from getting a share of the Caspian oil and gas ‘pie’ unless that involves Russia as intermediary. The pipeline agreement can be seen as a victory for Moscow’s strategic thinking,” said Poletaev.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
At an energy summit in held in the western Turkmen port of Turkmenbashi on May 12, the presidents of Turkmenistan, Kazakstan and Russia agreed to build a pipeline with a 30 billion cubic metre per year capacity. It will take Turkmen gas north through Kazakstan to Russia
The trilateral agreement, together with a complete feasibility study, will be signed in early September. The cost of the project is put at one billion US dollars
Also on May 12, an informal energy summit was held in Krakow, where the presidents of Ukraine, Azerbaijan, Georgia, Lithuania and Poland discussed how to overcome their dependency on Russia as a conduit for energy. An agreement was reached to build an additional section of the pipeline which currently runs from Odessa on Ukraine’s Black Sea coast to the town of Brody, so that it extends to the Polish town of Plock, enabling further transit to Gdansk on the Baltic.
Kazakstan’s president Nursultan Nazarbaev did not attend the Krakow meeting.
NBCentralAsia analysts say the Caspian pipeline agreement undoubtedly strengthens Russia’s energy position in Central Asia, placing a question-mark over an alternative plan, backed by the European Union, to lay a gas pipeline across the Caspian Sea, thus bypassing Russia. At the same time, they say, it does not mean Russia will gain a total monopoly over the region’s energy exports.
Rovshan Ibrahimov, head of international relations at Qafqaz University in Baku, says there are already quite a lot of alternative projects to export Central Asian gas and oil. The Baku-Tbilisi-Ceyhan oil pipeline is already up and running, and routes to China, Europe and India are also being discussed.
“Ultimate control is out of the question; Russia is just trying to secure the supplies which Turkmenistan has promised it,” said Ibrahimov.
Kazakstan-based political scientist Maksim Kaznacheev says that although the EU will now find it more difficult to achieve a diversification of Central Asian export routes, it could still help increase Turkmen and Kazak gas production by investing in new deposits and promoting a settlement on the legal status of the Caspian Sea.
“Russia has strengthened control over Central Asian hydrocarbons for the medium term, but western players have a chance to gain control over supplementary hydrocarbon production in the long term,” he said.
Total gas reserves in Turkmenistan are estimated at nine trillion cu m, and at three trillion in Kazakstan.
Both countries plan to more than double the volume of natural gas they extract for export, but the existing Central Asia-Centre pipeline that goes to Russia can only take 60 billion cu m a year. More capacity is needed if exports are to rise, so the new Caspian shore route makes economic sense.
NBCentralAsia analyst Eduard Poletaev says that before Russia enters into fresh talks with the EU on the Energy Charter, it wants to ensure it has the energy-rich Central Asian countries behind it.
It is apparent from the latest trilateral pipeline agreement that the major exporters in the region will coordinate their export policies with Moscow.
“There is now a greater likelihood that the Kremlin will block the EU from getting a share of the Caspian oil and gas ‘pie’ unless that involves Russia as intermediary. The pipeline agreement can be seen as a victory for Moscow’s strategic thinking,” said Poletaev.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
