Chinese and Iranian directions

Chinese and Iranian directions

By Arthur Dunn

At present, Turkmen natural gas is exported via the transnational pipeline Turkmenistan-Uzbekistan-Kazakhstan-China, put into operation in December 2009. The pipeline consists of three threads with a total capacity of 55 billion cubic meters. m and is intended to supply gas to China in the amount of 40 billion cubic meters. m per year. In 2014, it exported a total of 23.8 billion cubic meters. m of natural gas. It is also planned to build the fourth line of the gas pipeline to China through the territories of Uzbekistan, Tajikistan and Kyrgyzstan, which will increase the annual transportation of Turkmen gas by an additional 25 billion cubic meters. m and to bring, thus, the total volume of supplies to China by 2021 to 65 billion cubic meters. m annually. Russian experts believe that China, expanding its sphere of influence in the region, pursues not only commercial, but also geopolitical goals. Beijing seeks to prevent foreign policy reorientation of Astana and Ashgabat to the West, as well as to limit the influence of Western oil companies. China focused its efforts on solving long-term tasks and aimed at intensifying Kazakh-Chinese and Turkmen-Chinese relations in the sphere of hydrocarbon supplies.

Another realized project is deliveries of Turkmen gas to the Islamic Republic of Iran on two new routes: Korpeje (Turkmenistan) - Kurtkui (Iran) and Dovletabad (Turkmenistan) - Serakhs (Turkmen-Iranian border) - Hangeran (Iran). In 2014, 5.9 billion cubic meters of gas were supplied to the Islamic Republic via these pipelines. m of Turkmen natural gas. The total design capacity of the gas pipelines allows bringing the deliveries to 20 billion cubic meters. m annually. Along with the diversification of gas supply routes in the eastern and western directions, Turkmenistan has intensified its attention to the southern export direction, towards Iran. In turn, Tehran also shows interest in Turkmen gas, hoping through its expansion of energy cooperation with Turkmenistan to increase its involvement in the implementation of projects for the export of Caspian hydrocarbons to foreign markets. In 2014, Turkmenistan delivered to Iran 6.5 billion cubic meters. m and in the future expects to increase the supply to 14 billion a year. To this Turkmenistan is pushing the advantageous geographical position of Iran, the territory of which is the most convenient way for the export of Central Asian resources. Moreover, the removal of Iran from discussion and implementation of new pipeline projects, which occurred after the introduction of sanctions by Western countries, hampered the development of the hydrocarbon potential of the Caspian region. At the same time, we should not forget that from 2006 to 6 billion cubic meters. m of Turkmen gas comes via a branch from the Iranian gas pipeline to Turkey. Do not forget that Ankara acts as the main lobbyist for the supply of Turkmen hydrocarbons to Europe via Azerbaijan. In July 2017 a meeting of the foreign ministers of Azerbaijan, Turkey and Turkmenistan was held in Baku, where issues of further cooperation in the energy sphere were discussed. The Baku Declaration, signed earlier, laid the foundation for the trilateral format of the relations of the Turkic-speaking countries closest in terms of culture and language. Expected to increase this transit to 10-15 billion cubic meters. Of course, the expansion of supplies of Turkmen gas to Europe via Turkey will largely be determined by Russian-Turkish relations in the context of the development of the geopolitical situation in the Middle East. Over more than 20 years of independent development, the countries of Central Asia and the Caspian region have made significant progress in establishing their own base for extracting and exporting hydrocarbon resources to foreign markets.

So, the opportunities of this region for oil and gas already make the region a significant factor of the world and especially of the European energy policy: the total proved oil reserves in the Caspian countries (Kazakhstan, Azerbaijan, Turkmenistan and Uzbekistan) reach 15 billion tons (about 2% of the world). At the current level of annual oil production in the region, these reserves will last for 65 years, and oil exports by 2015 could amount to 140-160 ml tons per year. The overwhelming majority of the Central Asian oil reserves are concentrated in Kazakhstan, Turkmenistan and Azerbaijan. Oil production and production in the region varies between 80-90 million tons, consumption - at the level of 20 million tons of oil per year. Among fossil fuels, gas consumption will develop at the highest rates: 1.9% per year. Oil will retain the first place in energy consumption (28%), the second will be coal, gas - the third place (26%), alternative renewable sources (RES) - only 7% of global energy consumption. Competition in the European gas market will intensify, which means that the south of Europe can rely on energy resources mainly from those countries whose logistics make fuel supplies to Northern and Central Europe uneconomical, the main region is the energy consumer. The countries of Central Asia, primarily Azerbaijan, Turkmenistan and Uzbekistan, own significant reserves of oil and especially natural gas, but do not yet have independent access to the European (or even more global) energy market. By their geographical location, these countries are potential competitors of Russian fuel and energy companies.

At the same time, it should be borne in mind that, although the oil of this region is more economical when applied to Europe than the Tyumen region, both are located in the closing zone of world trade. According to the estimates of the US Department of Energy and the International Energy Agency, the extraction and delivery of Caspian oil to the United States and Western Europe is more than 10 times more expensive than when oil wells are being re-opened on the shelf of the Gulf of Mexico and the North Sea. The countries of the region are not fully independent in controlling the volumes of supplies and prices for their energy raw materials, so Turkmenistan and Azerbaijan are looking for opportunities for energy cooperation with Iran and Turkey bordering them. Experts estimate that in order to ensure an independent output of Central Asian oil and gas to Europe (for oil and LNG to the Atlantic Ocean), it will take a total of $ 30-35 billion over 10 years. This should be direct investment in construction and installation, drilling, procurement of equipment, geological work.

In the countries of the region, organizational and engineering structures that are able to realize these investments are not available, they will attract investors, contractors and specialists from Europe, the US and Russia. As it was mentioned, the personnel potential in Azerbaijan is, and the mechanism of its attraction is developed by transnational oil companies operating in the post-Soviet space. In the oil and gas trade along the East-West axis, there are two related paradigms, fundamentally different in resolution methods: one, due to geography and the Soviet prehistory, the long-term political and the second, transient, inherent in the monopoly specificity of the Russian oil and gas sector. Russian state monopolies Gazprom, Rosneft, and Transneft are interested in monopoly rents and the preservation of their organizational and economic structures. The energy companies of the Central Asian countries and independent companies of Russia, on the contrary, are interested in independent access of their energy resources to the world market and, therefore, establish cooperation on the transit of energy resources through Georgia and Turkey, and seek opportunities for energy cooperation with Iran's border with Iran. These competitive factors are already in place. If we take into account that the base fields of Russia - Tyumen and Tatarstan - in the phase of decline, and the fields of Eastern Siberia are located far from the European consumption centers; that the new areas on the shelves of the Arctic seas and the seabed around the North Pole are at the initial stage of development, which is expected to be very costly - then control over the corridors of oil and gas transit from the countries of the region to Europe becomes extremely urgent. The need for effective steps to ensure the accounting and balance of interests of gas producers, transiters and consumers, and the development of clear, transparent and non-discriminatory principles of the relationship between them is becoming increasingly evident. It is this approach that underlies Turkmenistan's energy policy, determines the content and direction of proposals and practical actions in this area. World energy reserves and natural gas as the most important and most environmentally friendly part of them are the property of all mankind.

The sustainability of the world economy today relies on the sustainability of world energy. This means the need to develop proven mechanisms of state activity in this sphere that are backed by international law, the formation of strong and universal principles governing the course of global energy cooperation. As a responsible and reliable producer and supplier of energy resources, Turkmenistan is ready for close cooperation with states and international institutions in order to develop coordinated, transparent approaches to all issues of the global energy strategy.
 

 15.01.2018

 

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