Kazakhstan, Russia and Turkmenistan agree to renovate the Caspian gas pipeline

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Kazakhstan, Russia and Turkmenistan agree to renovate the Caspian gas pipeline

The Caspian Route for Central Asia gas coming from Central Asia to Europe, a rival to the Trans-Caspian Project, seems to be taking shape eventually. Following the much-spoken-about summit, Kazakhstan, Russia and Turkmenistan agreed to overhaul the worn-out Caspian gas pipe and construct a new parallel one.

The Caspian Route for Central Asia gas coming from Central Asia to Europe, a rival to the Trans-Caspian Project, seems to be taking shape eventually. Following the much-spoken-about summit, Kazakhstan, Russia and Turkmenistan agreed to overhaul the worn-out Caspian gas pipe and construct a new parallel one. Construction works are expected to start as early as in the second half of 2008; to this end, the governments of the three states are expected to sign a concrete agreement.

This project had been offered back in 2003 by Saparmurat Niyazov, the late President of Turkmenistan, in view of growing gas production. The planned gas pipeline capable of 30 billion cubic meters per year is planned to run along the Caspian shore - 360 km across Turkmenistan and another 150 km across Kazakhstan – to join the Central Asia – Center gas pipe at the Kazakh-Russian border.

The EU-approved Trans-Caspian pipe would call for construction of a similar pipe across the Caspian Sea bed to bypass Russia. Some analysts believe that the Caspian Pipeline is a part of Russian strategy to surpass Europe in struggle for the O&G potential of Central Asia. Russia, Turkmenistan, Kazakhstan and Uzbekistan jointly possess about 70% of proved global reserves of gas.

However, the Kazakh leadership has been clear: the issue of hydrocarbons transportation should be solved with participation of all the Caspian littoral states, including Russia. Meanwhile, when commenting on the trilateral meeting, Kazakhstan President N. Nazarbayev stressed that “there’s no politics involved; diversification of gas and oil routes on beneficial conditions is of prime importance”.

”Providing an access to national transportation capacities is a normal practice for integrated countries. European countries not only accommodate oil and gas pipelines, but also railways. There’s no use talking of us trying to bypass the West or the East; Kazakhstan, and Turkmenistan as far as I can understand, seek for more profitable routes to transport our resources”, Kazakh President said.

”Each side will have to elaborate all the economic, financial and technical details related to the project; but I think that it will bring obvios benefits to all of us”, Head of Turkmenistan agreed. “On our part, we guarantee supplies in required volume for the period to be defined in the course of negotiations”.

”It’s an old gas pipeline; it has been dormant, and our Turkmen colleagues have asked us to have it overhauled. It’s capable of handling up to 10.5 billion cubic meters per year: we need to have it renovated in the nearest time and have a new line constructed. Thus, this will add another 20 billion cubic meters of gas by 2012”, President Vladimir Putin of Russia said.

As of today, Kazakh, Turkmen and Uzbek gas is mainly transported via the Central Asia – Center gas network (at the summit, a joint declaration to expand it has been signed) launched back in 1967. Its annual capacity doesn’t exceed 50 billion cubic meters. Meanwhile, in 2007-2009 Turkmenistan alone plans to sell Russia up to 50 billion cubic meters; and by 2028 the figure is to reach 90 billion. In 2006, Kazakhstan exported 7.6 billion cubic meters of gas to Europe and the CIS countries via Russia, and plans to bring the figure up to 15 billion per year in the nearest future. Uzbekistan transported 9 billion cubic meters via Russian pipes in 2006. Only the figures alone substantiate the importance of the panned new route.

”First of all, transit volumes via Kazakhstan will grow as about 900 km of the Central Asia – Center gas pipeline run across our territory”, said Baktykozha Izmukhambetov, Kazakh Energy Minister, when commenting on the benefits obtained by Kazakhstan from the project. “Besides, owing to this declaration, we will provide the South of Kazakhstan with gas through participation of the KazMunaiGaz National Oil&Gas Company in exploration and development of off-shore and on-shore fields in Turkmenistan”.

Kazinform