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Turkmenistan takes way to Europe via Azerbaijan

Oil&Gas Materials 14 May 2011 13:20

Azerbaijan, Baku, May 14 /Trend, H.Hasanov/

The route to Europe via Azerbaijan is becoming increasingly attractive for Caspian littoral Turkmenistan, which concentrates the fourth largest natural gas reserves in the world (after Russia, Iran and Qatar),.

This can be judged on the basis of talks between President of Turkmenistan Gurbanguly Berdimuhamedov and the Romanian President Traian Besesku in Bucharest (May 11-13). In a joint statement, the sides already noted the importance of supplies of Turkmen natural gas to the European market, including a priority of the Nabucco project and AGRI (Azerbaijan-Georgia-Romania Interconnector) for Romania.

It is known that both projects were initially designed to supply gas from Azerbaijan, and in future to claim to be the major transit of hydrocarbon resources from Central Asia. Besides Turkmenistan, in this region the significant reserves of natural gas are owned by Uzbekistan and Kazakhstan, exploration work is actively carried out in near Afghanistan. As known, now the Turkmen oil is transported through Azerbaijani ports on a regular basis.

The traditional way for Turkmen gas to Europe passed through the pipeline communication of Russia. Gas transport monopolist Gazprom for a long time has used transit without alternative, purchased Central Asian gas at a discounted price for resale to Europe. However, with the onset of global recession, those purchases dropped significantly - from annual 40-50 billion to 10 billion.

Is the transit of Turkmen gas to Europe via Iran possible? Observers believe that given growing total capacity of the pipeline system between Turkmenistan and Iran over the last two years, some chances have appeared. But again, it does not deal with the short term, given the negative attitude of the United States and Europe towards Iran's nuclear program.
It should also be noted that in January this year, after a meeting in Ashgabat with European Commission President Jose Manuel Barroso, Berdimuhamedov called the "most attractive" way to deliver Turkmen gas to Europe the construction of a pipeline via the Caspian Sea.
"As for ways to deliver natural gas from Turkmenistan to European markets, there are several options here. The most attractive of them from commercial, financial and infrastructural point of view is to build a pipeline via the Caspian Sea," he said.

Judging by recent news, another leader of a European country suggested his support in this regard. The Romanian President Basescu told reporters in those days that "today Turkmenistan is a reliable exporter of gas and a key player in the global energy arena", while stressing the constructive role of Ashgabat in addressing global energy security.
Basescu highlighted Romania's interest in Turkmen gas supplies. Berdimuhamedov, in turn, spoke in favor of signing agreements on cooperation in gas sphere between the EU, Turkmenistan and Azerbaijan.

"An important condition for the mutually beneficial energy cooperation is the political will of the countries involved, which should be framed as an agreement between the EU, Turkmenistan and Azerbaijan, which will provide opportunities to take concrete steps, including the establishment of the consortium to implement the plans of productive interaction," Berdimuhamedov said. The sources close to negotiations believe that it deals with a political declaration and an inter-governmental agreement between Azerbaijan and Turkmenistan being prepared to be signed.

If implemented, the Trans-Caspian pipeline infrastructure will allow connection of the Caspian resources to the Nabucco project, of which construction is scheduled for 2013.

At the same time, the design capacity of the Trans-Caspian section stretching about 300 kilometers (via the Caspian seabed between Turkmenistan and Azerbaijan) is closely linked to the demand for Turkmen gas in Europe, of which requests have become more modest with the onset of a global recession.

Maximum capacity of the Nabucco pipeline is planned at the level of 31 billion cubic meters per year. Project participants are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE (the latter company is already working in the Turkmen section of the Caspian Sea as part of the Production Sharing Agreement).
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