Monday, 12 October 2009
On July 13, 2008 an agreement was signed in Ankara between the parties of the consortium for the Nabucco pipeline on the intention of building this pipeline. It is worth noting that the Nabucco pipeline was originally intended to transport natural gas from Central Asian states such as Turkmenistan, Kazakhstan and Uzbekistan. However, on the eve of the signing of the contract for the construction of Nabucco, the gas supply agreements from these countries had not been concluded. Thus, members of the consortium initially hoped to transport Azerbaijani gas, which would be produced at the Shah Deniz offshore field. Curiously, despite the wishes of the consortium, an agreement for the supply of Azerbaijani gas has also still not been concluded. Even if the negotiations between the consortium and Azerbaijan were successfully completed, the project would be unprofitable without transit gas from Central Asia.
In this case, there is a need to build the Trans-Caspian pipeline to pump natural gas from Central Asia to Baku and further via the Baku-Tbilisi-Erzurum pipeline to Nabucco.
It is worth noting that the idea of constructing the Trans-Caspian pipeline emerged long before the Nabucco project. During the first official visit of President Turkmenbashi of Turkmenistan to the United States in April 1998, the possibility of building a pipeline to export Turkmen gas to European markets was reviewed. Thus, the United States allocated $750.000 to start feasibility work at the site of possible passage of the Trans-Caspian pipeline. This amount was indeed small for large-scale works, but had a symbolic significance. In general, the Clinton administration broadly supported the implementation of the project; by the way, Clinton's advisor on energy, Morningstar, mentioned in many memoirs of this project the possibility of U.S. Eximbank financing the construction of a pipeline from a consortium created by American companies. The United States also guaranteed a mediator to resolve disagreements over the division and legal status of the Caspian Sea between Azerbaijan and Turkmenistan.
A consortium of companies that intended to start construction of the pipeline was established, which includes General Electric Capital, Bechtel and Shell. It is worth noting that at the time the Trans-Caspian pipeline included not only the 300 km section in the Caspian Sea, but also the 715 km section in Turkmenistan from the region of Malay to Shatlyk, as well as the 984 km section from Baku to Erzurum. Later on, from Baku to Erzurum, at the last Baku-Tbilisi-Erzurum gas pipeline was constructed. This pipeline was built to export Azerbaijani gas from the Shah Deniz field, which was found later in the Azerbaijani sector of the Caspian Sea. The presence of Azerbaijani gas has led to it becoming a demanded player in the Trans-Caspian pipeline. This proposal was not endorsed by Ashgabat. This, as well as the differences between the two countries over the sharing of the Caspian Sea, and belonging to a particular field and led to the aggravation of relations between the parties.
Since Putin came to power in Russia, it has followed a more explicit policy in the energy field and after Putin's visit to Ashgabat, Turkmenistan refused to follow the steps to develop the Trans-Caspian pipeline. It should be noted that Turkmenistan did not wish in any way to spoil relations with Russia, through which passed all gas exports to European markets. Not having received adequate support from the United States, Turkmenbashi did not pursue an independent policy to implement transit projects for the European markets. So, on July 11, 2000 during a meeting with Secretary of State Advisor on CIS Stiwn Sestanovich, president Turkmenbashi again demanded U.S. political and economic guarantees for the implementation of the Trans-Caspian pipeline. Turkmenbashi required these guarantees primarily in case of worsening relations with Russia, as it could respond with dissatisfaction to the Trans-Caspian pipeline project. In the same year, General Electric Capital and Bechtel members of the consortium which are intended to build the Trans-Caspian pipeline company left the consortium.
Again, talk about the construction of a "truncated Trans-Caspian" pipeline began in 2002 when, in Vienna, the first negotiations began on the construction of Nabucco. Hope for the project has strengthened after Berdymuhadedov assumed the Turkmen presidency. Relations between Turkmenistan and Azerbaijan began to build: some previous problems were resolved; Ashgabat newly appointed its ambassador to Baku, and the two presidents in turn will pay official visits to each other’s country. Further development of relations between the parties has followed. Moreover, in early September 2009, President Berdimuhamedov, repeating the old thesis of Turkmenbashi, announced claims on the disputed field Kapaz / Sardar, and even on offshore fields operated by Azeri-Chirag-Guneshli. In addition, as at the time of Turkmenbashi, Turkmenistan announced the strengthening of its naval fleet on the Caspian Sea.
At first glance, it seems that relations between Turkmenistan and Azerbaijan deteriorated again. Nevertheless, Azerbaijan and Turkmenistan Presidents redial to each other and even met in Aktau in mid-October at the summit of the former Soviet Union, bordering the Caspian Sea.
The fact is that Turkmenistan wants to bring its complaints to the attention of the U.S. and Western countries for their participation in resolving disputes with Azerbaijan in the role of mediator. Turkmenistan and Azerbaijan do not wish to once again face the annoyance of Russia, which can occur if the two countries wish to resolve the problem with the status of the Caspian Sea with a view to a possible trans-Caspian pipeline. These concerns arose after the 2008 August war in Georgia. At that time, Georgia had not received adequate support from its allies; as a result, Russia sent troops into Georgia and recognized the independence of Abkhazia and South Ossetia. Both countries have reasonably believed that if the Saakashvili regime, which is close to the west, did not receive such support, what should Azerbaijan and Turkmenistan expect in the event of a collision with Russia.
In this case, as in 2000, Turkmenistan requires guarantees from the U.S. on the implementation of corridors for the transportation of gas in a westerly direction. It should be noted that Turkmenistan, in contrast to the situation in 2000, cannot rush into a decision. The fact is that in late 2009, Turkmenistan plans to export gas to China via a pipeline now under construction. Thus, Turkmenistan will have an alternative corridor for the export of its gas. And while gas will not go to Western markets, getting out on the Chinese market is more relevant than ever. The plan was to suspend deliveries of gas to Russia beginning in April. The official version is that there was an explosion on the pipeline through which oil was exported from Turkmenistan to Russia. Turkmenistan accused Gazprom of deliberate sabotage, since in January 2009 the price of gas imports increased significantly (according to some sources, Gazprom pays Turkmenistan up to 375 dollars per thousand cubic meters). After global financial crisis, the price of energy dropped sharply, and Russia simply does not profitable by buying gas for this price.
Given the situation and the expectations of Turkmenistan, the west, and especially the United States, should react and properly analyze the subsequent steps. This is especially important because in the EU, specific steps in implementing the expected Trans-Caspian pipeline from Azerbaijan and Turkmenistan. The delay of its implementation is understood to be the EU’s reaction to Ashgabat’s human rights situation. In this case, the EU decided that if the human rights situation were improved, then the energy projects would be implemented. If the EU’s centers of decision-making insist on this version, the implementation of energy projects in Turkmenistan will not soon fill Nabucco, and Central Asian gas will remain in question.
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