Who will build Trans-Caspian gas pipeline?
By Emil Ismayilov
The issue of the need to diversify the sources and routes of gas
supplies to Europe is very relevant and on everyone's lips in
recent years. However, making ideas become real is important, and
in this regard, Azerbaijan has succeeded enough.
In particular, Trans-Anatolian Gas Pipeline (TANAP) and Trans
Adriatic Pipeline (TAP), which are the constituent elements of the
Southern Gas Corridor, will be built within the framework of 10
billion cubic meters of gas supply on the European market in the
second stage of the Shah Deniz field development.
Namely Azerbaijani gas is considered as the main source for the
Southern Gas Corridor, which has great potential both for the
supply of gas from other Azerbaijani deposits and other countries.
The possibility of Middle Eastern and Mediterranean sources’
joining the project is not ruled out. Turkmenistan can also be
considered as an additional source of gas.
Thus, Turkish President Recep Tayyip Erdogan, after the recent
talks with the head of Turkmenistan Gurbanguly Berdimuhammadov in
Ashgabat, said that TANAP, which will ensure transportation of
Caspian gas through Turkey till its borders with Europe, could
count on Turkmen gas supplies to Europe as well.
The commissioning of TANAP will take place in 2018. The initial
capacity of the pipeline is expected to be 16 billion cubic meters
with the possibility of reaching 31 billion cubic meters per year
in 2026.
“TANAP may transport gas both from Azerbaijan and Turkmenistan to
Europe through Turkey’s territory,” Erdogan said.
Following the high-level negotiations held on Nov.7, Turkmenistan’s
Turkmengaz State Concern and Turkish Atagaz company even signed a
framework agreement on cooperation in purchasing and selling of
natural gas.
Prior to this, following the high-level talks in Ashgabat in July
2013, the governments of Turkmenistan and Turkey also signed a
framework agreement on cooperation in supplying Turkmenistan’s
natural gas to Turkey and further to Europe.
In 1999, Turkey and Turkmenistan agreed on supplying 15.6 billion
cubic meters of gas and signed a corresponding contract.
The construction of a 300-kilometer gas pipeline under the Caspian
Sea to the coast of Azerbaijan is regarded as the best option for
ensuring the delivery of Turkmen energy resources to European
market.
Further, Turkmen hydrocarbons can be delivered to Turkey which
borders the European countries.
The main parties of the negotiations on the Trans-Caspian gas
pipeline are the EU and Turkmenistan. The tripartite negotiations
on this project between the EU, Azerbaijan and Turkmenistan started
in September 2011.
Azerbaijan, as a transit country, has repeatedly declared its
readiness to provide its transit capabilities in the presence of an
agreement between two parties (the EU and Turkmenistan).
In principle, the Trans-Caspian gas pipeline project can be
beneficial for all parties, but most of all it is needed by the EU
and Turkmenistan. Its construction will actually mean deepening of
the Southern Gas Corridor, which serves for diversification of the
sources of gas supply to the EU, and expansion of the corridor
resource base.
Turkmenistan, which is rich in gas resources, will gain access to a
new and alternative market. At the same time this project’s
realization will allow Azerbaijan to utilize its own transit
opportunities and generate additional revenues.
Turkey, along with benefits from the transit of Turkmenistan’s gas,
will also get an access to an additional source of gas imports.
The main question remains: who will construct the gas pipeline?
The EU and Turkmenistan have to undertake the main costs of the
pipeline’s construction, given their greater interest in the
project’s realization.
Azerbaijan and Turkey, which will act as transit countries may take
part in the project by carrying out works on preparation and
expansion of gas transportation infrastructure on their own
territories.
However, reaching a consensus on this issue could play an important
role in the formation of a new and major competitor in the
international gas market, that is, the Caspian gas.