What future for trans-Caspian pipelines after the "Turkmenbashi deal"?

The deal that was signed on May 12 in Turkmenistan's Caspian Sea port Turkmenbashi allows Russia to block Western countries from having direct access to Turkmen gas, ensuring Moscow's virtual monopoly on transportation routes from the Caspian. The deal is a severe blow to the Western trans-Caspian pipelines projects.

In early May 2007, two rival energy summits promoted two different strategies for the export of Caspian energy resources. A meeting in Krakow on May 11 brought together the leaders of Azerbaijan, Georgia, Lithuania, Poland and Ukraine to sign a joint declaration calling for increased cooperation in transporting energy resources from the Caspian region to Europe via the Caucasus. The following day, Russian President Vladimir Putin eclipsed the Krakow meeting by securing the participation of Kazakh President Nursultan Nazarbayev, who had previously confirmed his presence in Krakow, to a parallel summit with Turkmen President Gurbanguly Berdymukhammedov. The three leaders signed a major energy deal on the expansion of the Prikaspiisky pipeline to transport Turkmen natural gas to Russia along the Caspian Sea coast via Kazakhstan.

The energy deal shows that Russia has not lost ground in Central Asia. In addition to the Prikapiisky deal, the three states also signed an earlier declaration with Uzbekistan to upgrade a Turkmenistan-Uzbekistan-Kazakhstan- Russia gas pipeline. As a result, annual imports of Central Asian gas to Russia are expected to increase from 50 billion cubic meters up to 90 billion cubic meters.

What consequences for the trans-Caspian pipelines?

Besides securing gas exports to remedy possible domestic gas shortages, the deal is a significant step in Moscow's geopolitical objectives of jeopardizing European and US energy diversification policies. The European Union (EU) and the United States have supported several pipeline projects to gain a direct access to Caspian energy resources, using Georgia and Azerbaijan as transit countries. With the launch of an EU strategy for Central Asia and EU officials visiting the Central Asian countries, the EU has multiplied its efforts to negotiate directly with Central Asian energy producers in order to reduce its energy dependency on Russia. The EU is wary of Russia using energy as a political tool, particularly following the 2006 "energy row" between Russia and Ukraine.

Despite recent visits by US and EU officials to Astana, Kazakhstan appears now to be leaning toward Russia. In addition to natural gas, oil has also been an object of negotiations between Putin and Nazarbayev, who announced the expansion of the Caspian Pipeline Consortium Route (CPC). In this light, the US-backed project of building an oil pipeline under the Caspian Sea to expand the Baku-Tbilisi-Ceyhan (BTC) pipeline to Kazakhstan appears to be at risk.

Russia's new energy deals in Central Asia are also a severe blow to the Nabucco pipeline which involves several EU companies. The planned Nabucco pipeline will transport Caspian gas to Europe through Turkey, Bulgaria, Romania, Hungary and Austria. Like the BTC pipeline, the Nabucco project also foresees eastward expansion to Turkmenistan and Kazakhstan. The Hungarian government's announcement in late March that it will support Gazprom’s rival Bluestream pipeline project from Turkey to Hungary along the same route as Nabucco, has already cast some doubts on the Nabucco project.

The United States has backed EU efforts to establish direct dialogue with the Turkmen leadership and has also encouraged Georgian officials to take steps in the same direction. Georgian Prime Minister Zurab Nogaideli visited Ashgabat in March to discuss the westward transportation of Turkmen gas via the Caucasus. In a May interview with Radio Liberty, Georgian parliament speaker Nino Burdjanadze urged the EU to continue backing oil and gas pipelines that bypass Russia and use Georgia, Azerbaijan and Turkey as alternative routes.

Kazakhstan and Turkmenistan play pivotal roles in the building of trans-Caspian pipelines. In light of the recent change of leadership in Ashgabat, Western countries are questioning Turkmenistan's future foreign policy orientation. It remains to be seen whether Kazakhstan's recent move toward Russia is in line with its multi-vector and pragmatic foreign policy or whether the US and EU have indeed lost some influence in the Central Asian region.

By Lili Di Puppo

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