Caspian Sea energy and big powers

September 19, 2007

Part 2

------------- Routes taken to transfer Caspian Sea energy to international markets
One of the most important routes for transfer of Caspian Sea oil is through Baku–Tbilisi–Ceyhan (BTC) pipeline, which is greatly supported by the United States, Europe and Turkey.
The 1,776km pipeline starts on the western coast of the Caspian Sea and crosses the Republic of Azerbaijan, Georgia and Turkey before reaching the Mediterranean coast en route to international markets.
The main contractor for this pipeline was British Petroleum (BP) and it was scheduled to be inaugurated in May 2006 as the world’s second longest pipeline. When fully launched, it will decrease dependence of the European countries on the Middle East oil as well as on oil pipelines crossing Russia.
Trans-Caspian pipeline connects Aktau port of Kazakhstan to Baku port city in Azerbaijan. The proposed pipeline will be 700km long and after reaching Baku, it will be connected to Baku–Tbilisi–Ceyhan pipeline.
The pipeline is also supported by the west and while connecting the Caspian Sea to Europe, it will downplay the importance of Iran and Russia routes.
However, construction of the pipeline is bugged with a lot of environmental and legal problems and has been opposed by rival countries.
The French Total has practically taken preliminary steps to build the pipeline and the government of Kazakhstan has promised to feed the pipeline by supplying 150,000 barrels per day crude oil, which will be increased to 400,000 barrels per day.
The cost of the project has been estimated at 4 billion dollars and it is predicted to become operational by 2010.
While Russia is playing a game of monopolies in global energy market, especially with regard to gas exports to Europe and the United States is trying to deprive Iran of benefits of its superb regional and strategic position by building Baku–Tbilisi–Ceyhan pipeline, Turkmenistan is playing a balanced game and is trying not to confront any regional or global player such as Iran, Uzbekistan, Russia, China and the United States. Bilateral and multilateral cooperation with all involved countries is one of the main pillars of that country’s foreign policy.
It is according to that policy that Turkmenistan has tried to establish a regional and transregional system for exporting its energy resources and is trying through construction of various oil and gas pipelines via different routes to turn the existing limitations into opportunities.
In this way, the country’s policies will not be faced with serious opposition from other regional players and it will have their support and help in case of need.
According to current estimates, Turkmenistan has more than 102 trillion cu. ft. in gas reserves and is currently producing about 5.2 trillion cu. ft. of natural gas. As put by Turkmens, their country is exporting more than 3 trillion cu. ft. of gas per year.
The traditional route used for exporting Turkmenistan’s gas via Russia, exporting gas through pipeline from Turkmenistan to Iran’s Kord Kuy, exporting gas through Afghanistan (trans-Afghan), exporting gas through the Caspian Sea (trans-Caspian) as well as exporting gas through Turkmenistan – China pipeline are major routes that have been proposed for the export of Turkmen gas to global markets.
Despite the above modalities, at present, only the traditional route through Russia as well as the gas pipeline running from Turkmenistan to Iran are active and are used for exporting Turkmen gas.
At present, most gas exports from Turkmenistan are carried out through its traditional pipeline (which crossed the former Soviet Union) and Moscow has complete control over gas sent by Ashkhabad.
Apart from the traditional route, Turkmenistan is also exporting some oil through Iran route. The line, which is 200 km long, was opened by presidents of both countries on December 29, 1997 and Turkmens are using it to export 5-8 billion cu. m. of gas per year to Iran. The plan to export Turkmenistan gas to Pakistan via Afghanistan (trans-Afghan) whose negotiations are still underway is another proposed route for export of Turkmenistan’s gas. The plan was first proposed 12 years ago, but it has not been implemented yet.
The most important hurdle on the way of its implementation is the security in Afghanistan, doubts on the part of Pakistan about gas reserves of Turkmenistan as well as economic problems. The route taking Turkmenistan’s gas to China is the newest and, at the same time, the most important gas export plan considered by Turkmens.
Turkmenistan and China signed a cooperation contract on natural gas during Niyazov’s visit to Beijing in April 2006. According to that contract, Turkmenistan is expected to export 30 billion cu. m. natural gas per year to China.
Exports will begin in 2009 and will continue for 30 years. The two countries’ officials have also reached an agreement on construction of a gas pipeline from Turkmenistan to China.
Inaugurating construction operations of the new gas pipeline, which will cover Turkmenistan, Russia and Kazakhstan; the president of Turkmenistan stated that in view of the existence of huge oil and gas reserve in Turkmenistan, the country is considering plans to build Turkmenistan–Iran, Turkmenistan–China, as well as Turkmenistan-Afghanistan–Pakistan–India gas pipelines and is also planning to implement trans-Caspian gas pipeline plan.
(Source: Research Institute of the Islamic Consultative Assembly