Baku, Ankara, Ashgabat Give Green Light for Diversifying Caspian Energy Exports - Ariel Cohen

Azerbaijan, Baku, 5 December / Trend / Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security at the Heritage Foundation, especially for Trend .

Turkey, Azerbaijan and Turkmenistan are attempting to reassert themselves as key Caspian region players. They are working to diversify export routes for the Caspian energy - a vital priority for the Europe and the U.S. Ankara, Baku and Ashgabat are making moves to ensure the flow of hydrocarbons to the Western markets, where they get top dollar. This is particularly important as energy prices and budgetary revenues are slumping.

Last week, the leaders of Azerbaijan, Turkey and Turkmenistan discussed cooperation in the -Caspian gas pipeline project at their summit in the Turkmen port city of Turkmenbashi. Besides the common Turkic roots, the countries share the interest in making the most out of their hydrocarbon riches and strategic location for energy transit.

No binding agreements have been signed yet. But the step-by-step progress in the talks signals a cooperative mode taken by Turkmenistan; the Turkish re-engagement in the Caucasus and the Caspian; and the evolution of an energy export route free of Russian control.

The thawing of ties between Azerbaijan and Turkmenistan, which have been locked in a dispute over the demarcation of the southern Caspian Sea, is also significant. It's a promising development for the future of the regional energy cooperation.

Baku had initiated the trilateral summit in its attempt to promote the U.S.- and EU-backed Nabucco gas pipeline that would bring Central Asian gas to Europe via Turkey. However, in an elegant diplomatic move, Nabucco was not mentioned in the communique to avoid angering Russia.

Moscow is assertively opposing the Western-controlled pipeline projects transporting Eurasian oil and gas to the European markets. In the 1990s, it was dead set against the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the Baku-Erzurum gas pipeline. Moscow also has been enlisting support among the European capitals for its South Stream gas pipeline that would directly compete with Nabucco and possibly derail it.

Azerbaijan is in the heart of the Nabucco project. While the western capitals provide support mostly in words, Baku works for the project in deeds. Azerbaijan has reaffirmed its strategic choice by carefully avoiding Gazprom's repeated offers to buy its available export gas from 2009 onward and by signing a five-year gas supply agreement with Georgia.

At the first stage of the Nabucco project, Azerbaijan will be a designated gas supplier. At the second stage, it will also be a transit point for the Turkmen gas. This is when the proposed trans-Caspian gas pipeline connects to Nabucco. It would link Turkmenistan to Azerbaijan, and later to Turkey via the existing Baku-Erzurum pipeline.

Turkmenistan's Gas Wealth In Turkmenistan, where the recent gas reserves audit has confirmed vast wealth, the interest in selling its riches to the west at the market prices is growing. Ashgabat also recognizes the geopolitical advantage of having multiple pipelines, and not depending on a single buyer.

While the late Turkmen leader Saparmurat Niyazov had committed majority of the gas production to Russia at low prices, Turkmenistan now sells some two-thirds of its 70 billion cubic meters annual output to Gazprom, supplying a big share of Gazprom's exports to Europe.

However, President Gurbanguly Berdimukhamedov may finally authorize his country entering the international project to sell its gas directly to the European consumers. Trans-Caspian Gas Pipeline (TCP) linking with the future Nabucco pipeline is clearly the most attractive and realistic option. For western consumers, Turkmenistan's participation would be a relief and a hope to ease their escalating dependence on Russia.

Although the Turkmen president supports diversifying gas transport routes, he displays great caution towards Russia. To ensure Ashgabat's lasting commitment, the West must take steps to shield Turkmenistan from Russian pressure, something it found difficult with the late Turkmenbashi.

Trans-Caspian Oil Route

Besides gas pipelines, Baku is also advancing its role as the regional oil transportation hub. During the Baku energy summit held on Nov. 14, 2008, the state oil companies of Azerbaijan and Kazakhstan agreed on the core principles of bringing Kazakh oil across the Caspian Sea to Azerbaijan for further export via the BTC pipeline starting from 2013. The BTC has been the primary export route for Azeri oil since 2007. Kazakhstan decided to join the BTC in 2006.

The recent agreement comes as a follow-up to an earlier 2008 bilateral treaty to take Kazakh oil across the Caspian for export via the BTC. The two states agreed to build the needed oil tankers and barges, as well as develop loading infrastructure on both sides of the sea. With the initial capacity of some 23-25 million tons a year, the project should become operational in time to provide a transportation outlet for the forthcoming Kashagan oil.

Some analysts suggested that with this agreement, Astana might shift attention to westward trans-Caspian oil exports. This would allow the oil from Kazakhstan to maintain sufficient flow in the BTC to make it profitable and validate the western-led efforts to bypass Russia.

As the Kazakh oil output will grow to reach at least 3 million barrels a day by 2020, a new Trans-Caspian oil pipeline (TCP-oil) may bring Kazakh oil into the BTC. The TCP-oil is an ambitious and politically sensitive project advocated by the U.S. government and international oil companies. It would greatly boost BTC throughput and give regional capitals additional oil export options.

Geopolitical implications Azerbaijan and Turkey have become an important energy corridor from the Caspian to the West. The U.S. and Europe should applaud these developments. Europe became especially interested in direct Central Asian gas supplies after a short supply disruption in the winter of 2006 due to Russia's dispute with Ukraine. Besides, according to the U.S. Energy Secretary Samuel Bodman, the August confrontation in Georgia underscored the need for Europe to diversify its energy supplies, who suggested that the Obama administration would remain engaged in the regional energy security.

Ironically, Russia's and Iran's attempts to control Caspian energy exports have pushed other Caspian players -- such as Azerbaijan and Turkmenistan -- closer to their European customers. The need to diversify customer base, of which the Russian Premier Putin talks often, applies to Baku and Ashgabat as well.

The commitment of energy producers and transit states to diversification is a positive economic and geopolitical trend. In this situation, the Ashgabat-Baku-Ankara consideration of a new strategic export route serves the national interests of each country and their western partners.

Azerbaijan confirms 177 more COVID-19 recoveries
Azerbaijan confirms 177 more COVID-19 recoveries
Azerbaijan’s Baku to hold World Cups in three gymnastic disciplines in 2021
Azerbaijan’s Baku to hold World Cups in three gymnastic disciplines in 2021
Azerbaijan confirms 135 more COVID-19 recoveries (UPDATE)
Azerbaijan confirms 135 more COVID-19 recoveries (UPDATE)
Loading Bars
Latest
Turkey reports 1,538 new COVID-19 cases, 68 deaths
Tajikistan decreases export volumes to Kazakhstan
Police clash with protesters at anti-lockdown demonstration in London
Georgian PM: Our victory must be an economically strong, educated, fair and European state
Iran's Persian Gulf Bid Boland Gas Refining Company declares amount of revenues to be received
Uzbekistan’s car manufacturing company to issue shares for public offering
Trump says he will name Supreme Court successor to liberal Ginsburg 'without delay'
Commander of Azerbaijani Naval Forces comments on information in social networks about Turkish coordinating officer
Gas transportation in Iran expands
Two dead as destructive storm Ianos hits central Greece
Kazakhstan decreases goods export to Ukraine amid COVID-19
Iran and Turkey's gas trade depends on future exploration in the Black Sea
President: If Azerbaijan had been an independent country then, we could have become the richest country in the world
Poland reports over 1,000 new COVID-19 infections, record high since outbreak
CEC sets coronavirus-related safety guidelines for Election Day
China's economy remains resilient despite external risks, says Xi
Iran's Bahar Azadi gold coin price falling
Iranian Energy Exchange announces products to be on sale September 20
Azerbaijani energy minister stresses importance of co-op within OPEC + format
Ukraine becomes popular destination for Turkish citizens looking for job
General Inspection Organization of Iran strengthen monitoring of banks
Uzbek-Chinese Asia Trans Gas to buy coolant and lubricants via tender
President Ilham Aliyev: The activities of our oil workers serve the interests of the Azerbaijani people
Madrid residents facing localised lockdown doubt curbs will work
TikTok files complaint against Trump administration to try to block U.S. ban
Geostat: Milk, meat production up in Georgia
Germany plans reform to avoid bankruptcy wave due to corona
Turkey decreases value of trade with Turkmenistan
Iran`s Rana Plus car to be launched in October
Uzbek-Chinese Asia Trans Gas to buy air filters via tender
President Aliyev: Key part of Azerbaijan's economy associated with oil and gas sector, and this to be case for many years to come
Azerbaijani president: New phase beginning for Absheron gas condensate field
Azerbaijan confirms 177 more COVID-19 recoveries
EU's share in total import of Azerbaijan up
Azerbaijan's eight-month export of gourds shows uptick
Azerbaijani startup launches new project for automating calculations of repair services
Iranian official: neither side fulfills their obligations in nuclear deal
Iran reveals amount of loans issued to manufacturing enterprises
Update on ski resort construction in Uzbekistan
Azerbaijan expecting inflation decrease by end of 2020
Bank of Georgia raises funds from Citibank to finance trade
Azerbaijani community: Armenia to be held responsible for massacre in Khankendi (PHOTO)
Iranian President expresses concern over people ignoring health protocols
Deaths from coronavirus exceed 24,000 in Iran
Turkmenistan increases imports of steel from Turkey
Iran Export Guarantee Fund`s support for exporters doubles
Kazakhstan's cargo transportation volumes decrease
Trial of social distancing rules on 2 Iranian airlines
Turkmenistan’s Exchange to be transformed into joint-stock company
Buy/sell operation at Iran Mercantile Exchange disclosed
Capital of banks in Iran announced
President Ilham Aliyev attends groundbreaking ceremony of Absheron field offshore operations (PHOTO)
Prices of Azerbaijani oil fluctuate
IMF talks Georgia's investment potential
Defense Minister: Azerbaijan Army ready to suppress any provocations of Armenia, undertake strong retaliatory actions
SOCAR applying digital road map for using high technologies
Uzbek Agroindustry and Food Security Agency to buy laboratory equipment via tender
Production of several products in Iran climbs
Weekly review of Azerbaijan's precious metals market
SOCAR gives sneak peek of its new dev’t strategy
Weekly review of Azerbaijani currency market
Georgian Tbilisi to be host city for 2021 ADB’s 54th Annual Meeting
Azerbaijani FM receives head of International Committee of Red Cross Delegation (PHOTO)
IMF, Turkmenistan review indicators for country's state budget
Minister: Georgia shows signs of economic recovery
Active supply of Turkish cement to Italy amid pandemic recorded
Uzbekistan to include goods and services in Unified Electronic Catalog
Kazakhstan's oil & gas company opens tender to buy filter blocks
Azerbaijani Central Bank unveils number of borrowers with restructured loans
Georgia sees increase in COVID-19 cases
Production started at Uzbek gas condensate field
Japan, Uzbekistan to increase tourist flow between countries
Turkmen Ministry of Construction to purchase equipment from Italian company
Kazakhstan, Russia agree to resume mutual flights
Turkmenistan, Ukraine discuss trade, economic cooperation
Iranian currency rates for September 19
Number of coronavirus cases in Uzbekistan pass 50,000
Armenia violates ceasefire with Azerbaijan 36 times
Australia COVID-19 hotspot records fewest cases since June
Turkey summons Greek envoy over expletive headline against Erdoğan
E3 says Iran sanctions relief to continue beyond Sep. 20
Georgia sends armored medical evacuation vehicles to Indonesia
65 new COVID-19 infections reported in Kazakhstan over past day
UN, Kazakhstan intend substantially contribute to environmental resilience (INTERVIEW)
Japan's new PM Suga to meet with Pompeo in October
Chinese mainland reports 14 new imported COVID-19 cases
Brazil's COVID-19 death toll tops 135,000
French finance minister tests positive for COVID-19
Trump says he sees no reason to delay TikTok decision
Eleven more coronavirus patients die in Moscow in past day
Qatar reports 224 new COVID-19 cases, 122,917 in total
Kazakhstan's crude oil exports to India surge in 1H2020
Georgia to acquire 135 000 doses of flu vaccines in October
Istanbul introduces alternate working hours for public servants amid COVID-19 pandemic
Kazakhstan launches programming learning platform
UK PM Johnson says second wave of virus inevitable, new restrictions possible
Israel's daily new COVID-19 death cases hit record high
Iran, Russia stress promoting scientific, technological coop.
Kazakh company looking to establish medical cannabis production
Azerbaijan’s Baku to hold World Cups in three gymnastic disciplines in 2021
All news