Russian transit monopoly in Central Asia broken?
The Russian monopoly on the transit of energy resources in Central Asia took two major hits. The US State Department
announced that it awarded a $ 1.7-mm grant to prepare a feasibility study of the Trans-Caspian Pipeline from
Turkmenistan to Azerbaijan and of an oil pipeline across the bottom of the Caspian Sea to connect Kazakhstan to the
Baku-Tbilisi-Ceyhan pipeline.
Then, Chinese President Hu Jintao and Kazakh President Nursultan Nazarbayev reached an agreement on the construction
of an oil pipeline to connect the Caspian with China and on laying a gas pipeline from Turkmenistan through
Kazakhstan to China.
The Baku-Tbilisi-Ceyhan pipeline, completed in 2005, was the first outlet for oil from the former Soviet Union that
bypassed Russia, which fiercely opposed its construction. The Baku-Erzurum natural gas pipeline, completed the same
year, holds the same honour for that hydrocarbon. Now those lines are being extended.
Deputy head of the Gazprom information policy department Sergey Kupriyanov said of the gas pipeline plans that
“That decision in no way affects Gazprom plans. The fact that financing was provided by the US State Department
once again proves that the Trans-Caspian Pipeline is a purely political project. They make accusations against us
that Gazprom is a political instrument and then openly give money for a feasibility plan at the same time.”
Troika Dialog analyst Valery Nesterov commented that “The project can be implemented only through the political
will of the leaders of Turkmenistan and Kazakhstan, even if their economies suffer somewhat.”
The European Nabucco project to provide natural gas from Central Asia bypassing Russia, which the new pipeline will
support, looked like a lost cause until recently. Russia signed agreements with Kazakhstan, Turkmenistan and
Uzbekistan to buy 40 bn cm of gas per year through 2011, thinking that that would encompass the region's full output.
However, the ink on those agreements was hardly dry when those countries' presidentsannounced that there was enough
gas for all and continued with the Western projects as well.
Nabucco is to go into operation in 2011, the same year Gazprom's agreements in Central Asia expire. Now China has
been added to the mix as well.
