Washington to work with Russia on all energy issues

by Kulpash Konyrova

Richard Morningstar, the US special envoy for Eurasian energy, on a diplomatic tour of the Caspian region to meet with US energy partners, visited Kazakhstan where he met with all of the key figures of Kazakhstan's oil industry. Before heading to Azerbaijan, Morningstar spoke to us in the Kazakh capital Astana about Caspian energy projects, EU's energy diversification policy, pipeline routes including Nabucco and relations with Russia.
Washington's courtship with Caspian countries once again shows that the US is trying to keep its finger on the pulse of future projects that are expected to provide energy security to Europe and around the world.

Question: Mr Morningstar, these two days have been very busy for you. What in particular did you discuss at the meetings?

Answer: Yes, I met with the Deputy Chairman of the Fund Samruk-Kazyna Timur Kulibaev, President of KazMunaiGaz Kairgeldy Kabyldin, Minister of Energy and Mineral Resources Sauat Mynbaev, Prime Minister Karim Masimov, and the technical experts leading such projects as CPC (Caspian Pipeline Consortium), KCTS (Kazakhstan Caspian Transportation), and Kashagan.
Based on the results of the discussions, I would like to say that Kazakhstan and the US are on the same page. Both sides realise how important these projects are in the light of the future big oil from the Caspian region. The White House understands that all projects that are currently being initiated by Kazakhstan are important for transportation of crude from this region. And we feel that there has been some progress on these two transport lines, as well as in the development of the Kashagan field.

Question: In the opinion of the US, how realistic is the idea of building submerged trans-Caspian oil and gas pipelines in the Caspian Sea to export hydrocarbons from Kazakhstan and Turkmenistan through Azerbaijan to Europe?

Answer: Well, first, there is the KCTS project that would allow transport of crude across the Caspian Sea by tankers. And, from our point of view, this is a quite rational project, and the US is ready to provide a political support to it.
And, in our opinion, KCTS and the expansion of the CPC are today's real routes for transportation of crude from the Caspian region.

As far as a gas pipeline from Turkmenistan is concerned, we hope that it will happen, and we support its implementation. The President of Turkmenistan has already announced his country's readiness to supply gas to Europe. However, certain measures and steps should be taken to make this project happen. First of all, Turkmenistan should increase its production of gas, both offshore and onshore.
There is another important consideration with respect to the submerged gas pipeline in the Caspian Sea: Turkmenistan and Azerbaijan must come to an agreement that such a pipeline is possible, and in general, to resolve all the offshore issues that exist between them.

Question: Would the US be willing to provide financial support to the trans-Caspian pipelines?

Answer: No direct subsidies should be expected from the US government here. But there is a potential of involving such American financial institutions as the Ex-Im Bank and the Foreign Investment Corporation. The US Trade and Development Agency may help in the development of the feasibility study for the project. The international financial institutions in which the US is a major participant may also help.
But, in any event, only private commercial organisation should be involved in this project.

Question: How, in your opinion, can the Nabucco project help the European Union countries achieve their energy security?

Answer: On the whole, the US has a positive impression about Nabucco, and we think this project is as an important step towards energy security.
We expect that the agreement signed in Ankara by Turkey and the consortium states will give a good impetus to the implementation of the project.

Question: Presently, though, there is neither TransCaspian gas pipeline, nor Nabucco. The only available gas pipeline is from Russia through Ukraine to Europe. Do you think the last year's gas conflict between Russia and Ukraine might repeat itself?

Answer: I hope that the conflict will not happen again. No country, including Russia, wants it. And to prevent it, the EU and the international financial institutions are working closely with Ukraine to help it pay its debt to Russia. The US, on its part, supports this process.
The financing is subject to certain conditions that Ukraine should complete to receive the money. The main condition is to reform its gas industry. The US is willing to work with both the EU and the financial institutions, as well as with Ukraine to provide technical support in the carrying out of these reforms.

Question: How effective has the European policy of diversification of energy imports been so far? Will the proposed new pipelines be enough, or will additional lines be needed?

Answer: I think that the European policy of diversification is becoming more and more effective. Last year's Ukrainian-Russian gas crisis has compelled it to mobilise its efforts to resolve the problems. Concerning the second question, there are many potential transport ways for gas, including the Southern Corridor, Nabucco, and the Turkey-Greece-Italy (ITGI) route. Also important are all oil projects.
Having said that, though, I would like to emphasise that Russia has been and remains the main and very important partner in supplying energy to Europe. It is also important that Europe continue to work on the development of renewable sources, not to be dependent in the future.

Question: What is the US's current policy with respect to the republics of the former USSR?

Answer: On the whole, the focuses have shifted. We have our strategic partners, but do not want this to be perceived as some danger for the others. With regard to Central Asia, in particular, President Barak Obama has said that we do not want to see any spheres of influence there.
We do not want to tell the countries what they should do, and, in principle, we could not have, even if we wanted. Our only concern is that such countries as Azerbaijan, Turkmenistan and Kazakhstan make a decision they think right, to provide energy security locally and globally.

And if Kazakhstan chooses to pursue the policy of diversification, it should be at liberty to do so. Therefore, taking this opportunity, I would like to emphasise that the US' current policy is not anti-Russian. The US is willing to work with Russia on all energy issues. And in doing so, we are trying to be depoliticised. We believe that game "who wins, who loses" is too expensive to play in today's world.
As you know, a new presidential commission will be set up led by the US State Secretary Hillary Clinton and the Russian Foreign Minister Sergey Lavrov. One of the committees of this commission will deal exclusively with energy. The US will do everything possible to cooperate with Russia. And in this context, Kazakhstan has always been an example of how to build its relationship with both Russia and the US.