Trans Caspian Pipeline could affect structure of int’l system for decades to come

Oil&Gas Materials 15 June 2020 13:08 (UTC +04:00)
Trans Caspian Pipeline could affect structure of int’l system for decades to come

BAKU, Azerbaijan, June 15

By Leman Zeynalova – Trend:

Trans Caspian Pipeline could affect the structure of international system for decades to come, Trend reports with reference to the article posted on the Atlantic Council’s website.

Offshore pipeline in the Caspian Sea with a length of 300 km and an ultimate capacity of 32 bcm/a will branch-off at a connection with the East-West pipeline in Turkmenistan or, for the first stage, from a collection point of offshore Caspian production/treatment in Turkmenistan. It will feed into Sangachal terminal/SCP in Azerbaijan

The necessary link connecting Turkmen gas with existing Southern Gas Corridor infrastructure is the Trans-Caspian Gas Pipeline (TCGP). The 180-mile long TCGP is an EU Project of Common Interest (PCI) and was supported by an EU grant in 2018.

“The TCGP is a crucial link, a catalyst for potential changes that could affect the structure of the international system for decades to come. It could drive economic growth, promote regional stability.The planned TCGP would source natural gas onshore in Turkmenistan for transmission under the Caspian Sea and insertion into the SGC. Like the BTC and SCP, the TCGP would form a new investment corridor and attract interest in maritime transport and telecommunications. The TCGP would provide important opportunities for US exports of goods and services for gas transmission, related petrochemical projects, and other energy-industrial sectors,” reads the article.

The authors say that like the BTC oil export pipeline twenty years ago, the TCGP is a demonstration project. “The BTC and SCP, besides being of great commercial benefit, established and strengthened the independence of participating South Caucasus countries.”

“The TCGP would do this over a broader geographic area and with deeper implications. Beyond Turkmenistan, benefits would extend also to other Central Asian countries. Plans are on the drawing board for Kazakhstan and Uzbekistan to join Turkmenistan in subsequent trans-Caspian energy projects, connecting them strategically to the West,” the article says.

The authors believe that as European hydrogen demand develops, carbon captured from Turkmenistan’s natural gas can be easily stored in Azerbaijan’s and Romania’s depleted hydrocarbon deposits.

“Capturing and storing that carbon in Azerbaijan or Romania will facilitate the production of blue hydrogen for direct piping to Europe from Azerbaijan.Constructing the TCGP does not require Turkmenistan to enter into production sharing agreements (PSAs); the abundant gas deposits in the country’s east are already developed, the pipeline for transmitting the gas to Turkmenistan’s border already exists, and the business model for constructing the TCGP does not require them,” said the article.

“Turkmenistan constructed the East-West Pipeline (EWP) to bring gas right up to its coast on the Caspian Sea. Turkmenistan will sell this gas there, at its border on the Caspian seacoast. The EWP is now capped, awaiting connection across the sea by way of the TCGP,” say the authors.

The authors note that TCGP itself will be built and operated by a pipeline company not owned by gas producers, following a standard industry business and financing model. An independent carrier will execute the technical studies leading to sales-purchase agreements between European buyers and Turkmenistan. PSAs are therefore also unnecessary for the TCGP’s construction.

“Additionally, Turkmenistan’s gas is coincidentally closer to existing infrastructure than any other new source of similar proportion and benefit. Only 180 miles separate Turkmenistan’s coast from the SCP infrastructure that provides access to TANAP and the Trans-Adriatic Pipeline (TAP). Once the TCGP is built to the SGC, the projected White Stream pipeline under the Black Sea from Georgia to Romania can be constructed. It is the most direct link for Central Asian gas and blue hydrogen to European customers,” reads the article.


Follow the author on Twitter: @Lyaman_Zeyn