Where to direct Turkmen gas?

Where to direct Turkmen gas?

Azerbaijan, Baku, Feb. 21 / Trend /

Azer Ahmedbeyli, Trend analytical centre expert

Turkmenistan ranks fourth on the largest natural gas reserves in the world. From year to year, it increases production volumes. According to BP, Turkmenistan produced 42.4 billion cubic meters of gas in 2010 compared to 36.4 billion cubic meters in 2009. According to the National Statistics Committee, the production volume in 2011 increased by 40.6 percent compared to 2010. Turkmenistan more and more needs additional export routes of supply.

The Turkmen President was re-elected for another term. After his re-election, the policy of multipolarity of the sale markets remains unchanged. Turkmen energy resources will continue to be exported to the world markets via the best alternative routes, local experts and international observers said. Besides the existing export routes to Russia, Iran and China, there are three alternative Turkmen gas export routes: the Trans-Caspian, Trans-Afghan and Caspian projects. What is going on around these projects and what is their status today?

The Trans-Afghan gas pipeline (Turkmenistan-Afghanistan-Pakistan-India)

The design capacity of the Trans-Afghan pipeline (the territories of Turkmenistan, Afghanistan, Pakistan and India - TAPI) is up to 33 billion cubic meters of gas per year, length - more than 1,700 kilometers. Buyers are Pakistani and Indian gas companies.

Official Ashgabat has recently reported that the principal agreement was reached with Pakistan at a cost of Turkmen gas. The agreement will be signed soon. The price of transit through the territory of Afghanistan remains unresolved. At present, the principle of forming an international consortium is being discussed. The issue with the financing of the project is being resolved.

The main obstacle to the project implementation is the lack of security guarantees for the construction and further exploitation of the gas pipeline, especially in the Afghan area, despite assurances from the Afghan government and at a lesser extent, the presence of a competing project on the route Iran-Pakistan.

These two factors do not objectively give the chances for TAPI to be implemented in the coming years. The intention may be strengthened by the latest facts. It seems that the confrontation of major world powers is intensified in the region.

According to Pakistani media with reference to the unnamed sources, Russian energy minister and Gazprom senior officials will visit Pakistan to discuss Russian side's participation in the project of Trans-Afghan gas pipeline. Pakistani The Nation said that the fact of Russia's interest in the TAPI project and possible participation of Gazprom irritate the U.S.

On the other hand, according to the Pakistani media, the Americans are trying to persuade Islamabad to block the participation in the construction of the Iran-Pakistan gas pipeline, offering LNG supplies for a discount price as an alternative. However, at a meeting in Islamabad, Pakistani President Asif Ali Zardari has recently assured his Iranian counterpart of commitment not only to successfully complete, but to speed up the project implementation.

The last news from the pages of The Express Tribune, reports on Russia's proposal to the Pakistani side to provide Gazprom with the right to build the Iran-Pakistan gas pipeline (an Iranian plot was almost constructed) worth $ 1.2 billion beyond the competition. According to the report, in this case, Moscow will ensure financing for the project.

It seems that the construction of the Trans-Afghan gas pipeline is supported by the U.S., Russia, and importing countries. But it is clear that it is impossible to implement the project without resolving the inter-Afghan problems. At the same time, it will lose relevance, especially for Pakistan, if the Iran-Pakistan project is implemented.

Caspian gas pipeline (Turkmenistan-Russia)

The design capacity of the Caspian gas pipeline (along the coast of the Caspian Sea from Turkmenistan to Russia via Kazakhstan) is up to 30 billion cubic meters a year. In May 2007, the presidents of Russia, Kazakhstan and Turkmenistan signed an agreement to build a gas pipeline. At present, the preparation of a feasibility study was suspended under the influence of the global recession and changed conjuncture. Senior Russian officials have previously stated that the agreement was reached to freeze the project. Turkmenistan said that there were no such negotiations. Indeed, what does Russia need additional pipeline for, if the main - Central Asia-Center is not filled completely.

Trans-Caspian gas pipeline (Turkmenistan-Azerbaijan-Europe)

The design capacity of the Trans-Caspian pipeline stretching about 300 kilometers (through the bottom of the Caspian Sea between Azerbaijan and Turkmenistan) linked to the demand for Turkmen gas to Europe and the determination of the status of the Caspian Sea. There are no direct agreements for the project implementation. The European Union gave a mandate to start the negotiations to prepare an agreement between the EU, Azerbaijan and Turkmenistan on the Trans-Caspian gas pipeline in September 2011. But at present, the status quo of the project remains unchanged. Russia and Iran stand against the implementation.

Thus, all the alternative projects on Turkmen gas export, in fact, suffer a fiasco now. The only country welcoming the current situation is China. It continues to increase the volume of gas purchased from Turkmenistan at a favorable price. Turkmenistan and China signed an agreement for additional gas supplies via the Turkmenistan- China pipeline in November 2011. The contract envisages an increase in gas supply by 25 billion cubic meters of natural gas per year. This will bring the total amount up to 65 billion cubic meters of gas per year taking into account the previous agreements.

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