Baku, Ashgabat agree on Trans Caspian gas pipeline

Oil&Gas Materials 16 March 2012 22:03 (UTC +04:00)
Baku and Ashgabat have agreed on the construction of the Trans-Caspian gas pipeline
Baku, Ashgabat agree on Trans Caspian gas pipeline

Azerbaijan, Baku, March 16 / Trend V.Zhavoronkova /

Baku and Ashgabat have agreed on the construction of the Trans-Caspian gas pipeline, Deutsche Welle (DW) reported on Friday, citing a source in the government of Turkmenistan

"Such negotiations [on the Trans-Caspian gas pipeline] are already underway and an agreement in principle between Baku and Ashgabat has already been reached," the statement said.

According to information, a senior official explained that unresolved status of the Caspian Sea is still a problem which benefits Russia.

He said the EU Commission should exert pressure on Moscow to ensure that Russia does not oppose the Trans-Caspian gas pipeline project.

Berlin hosted an international conference on the prospects for energy cooperation between the EU and Turkmenistan. The conference discussed in particular Southern Gas Corridor from the Caspian region to Europe.

Turkmen Minister of Oil and Gas Industry and Mineral Resources Bairamgeldy Nedirov said by 2030 the volume of gas production in the country is projected to reach 230 billion cubic meters per year, of which 180 billion will be exported, DW reported.

Currently, the main buyers of Turkmen gas are Russia, China and Iran. Preparation for construction of another pipeline - through Afghanistan and Pakistan to India is nearing completion.

Nedirov also said "the process of substantial discussion of the pipeline to Europe has recently stepped up considerably".

Head of the Directorate General of Energy Commission of the European Union, Jean Arnold Vinois, who spoke at the conference on behalf of European Commissioner for Energy Günther Oettinger said "Turkmenistan can play an important role in the diversification of EU energy supply routes".

The EU representative spoke in detail about the benefits of the possible involvement of Ashgabat in the construction of the Southern gas corridor through Azerbaijan and Turkey and further to Europe, the enormous volumes of gas that the Europeans are willing to buy in Turkmenistan at consistently high prices, which is important for potential investors.

Vinois advised Turkmenistan to hurry up with the decision, since other players in the energy market - Iraq, Russia, and possibly Iran - will not tarry. Moreover, participation in this project meets stated goal of Ashgabat - further diversification of export routes for Turkmen gas and reducing dependence on its customers, which still can be counted on the fingers of one hand.

They also discussed construction of the Trans-Caspian gas pipeline between Baku and Turkmenbashi with a length of about 300 kilometers under the sea.

Wolfgang Peters, Director of Supply, responsible at the German energy concern RWE for Russian and the Caspian and Central Asian regions, spoke at the Berlin conference in favor of Southern Gas Corridor.

He said RWE in interested in diversifying gas suppliers, which would increase the reliability of concern's customer service.

"Putting all eggs in one basket is not too good," - said Peters, referring to Germany's imports dependence on Gazprom and recalling the disruption of supplies of Russian gas in February. In addition, gas from the south would allow more efficient use of capacities of the Czech transit falling short of being loaded.

Peters believes during negotiations between representatives of Azerbaijan and Turkmenistan with the assistance of the European Commission it's necessary to prepare, and then sign an intergovernmental agreement, which should fix quota of Turkmen gas in the Southern Corridor.

"The advantage of such an agreement would lie in the fact that an international legal framework for the construction of the Trans-Caspian gas pipeline will be created, which guarantees freedom of transit of fuel to Europe," Peters said in an interview with DW. At the same time the EU Commission would assume the patronage function, since the gas in the long run, will come to the EU.

"It will, on the one hand, lead to the diversification of gas supplies, which will increase the energy security of Europe, on the other - will allow Turkmenistan to diversify its export portfolio by entering an extremely attractive and promising European market," Peters said.

The Southern Gas Corridor is one of the priority energy projects for the EU. It is designed to diversify the routes and sources of supply and thereby increase the energy security of the EU. The Southern Gas Corridor project includes Nabucco, the Trans Adriatic Pipeline (TAP) and ITGI.