09/18/2009, 00.00
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Central Asia’s energy jigsaw puzzle getting more complicated

Leaders from Russia, Kazakhstan, Azerbaijan and Turkmenistan meet to discuss energy and pipelines. Wooed by Russia, Europe and China, energy-rich Central Asian nations are trying to get the most out of their would-be partners.
Astana (AsiaNews/Agencies) – In last week’s pan-Caspian summit between the presidents of Russia, Kazakhstan, Azerbaijan and Turkmenistan, held in the Kazakh city of Kenderly, Moscow tried again to impose itself on Central Asia partners. Turkmenistan instead expressed its determination to resist Moscow, whilst Iran voiced its displeasure for not being invited.

The meeting between four of the five Caspian Sea nations ostensibly did not follow an official agenda, nor did it end with an official communiqué.  In order to pre-empt Iranian protest for not being invited as the fifth Caspian nation, Kazakhstan had stated earlier that pan-Caspian issues like subsea resources were not up for discussion. Yet credible sources did report that oil pipelines and energy supplies were discussed.

The network of oil pipelines that crisscross Central Asia are a legacy of the former Soviet Union. For this reason, Russia has tried to maintain its comparative advantage. By contrast, the European Union has offered to finance alternative routes to bring energy to its cities, thus bypassing Russia.  

China also is not sitting idle either. It is in fact offering rich contracts to build eastbound pipelines. India has also an eye on the prize even though Iran and Pakistan are its closest “natural” neighbours”.

Iran is interested in having new pipelines run through its territory, convinced that this way it can still sell its energy despite the embargo regime it is under, consequence of its nuclear programme. However, Tehran lacks both technology and money to build new pipelines, and hopes someone else might do it instead.

Perhaps it is also no coincidence that the four-nation summit was held not far from the port city of Aqtau, close to the port of Kuryk, which is the terminal of the Kazakhstan-Caspian Transportation System, expected to run from Eskene, onshore near Tengiz.

The oil it will carry could thus enter the Baku-Tbilisi-Ceyhan pipeline, turning it into the Aqtau-Baku-Ceyhan pipeline, terminating near the Turkish Mediterranean coast.

In such a scenario, Kazakhstan, Central Asia’s largest and most stable nation, could still be Moscow’s best friend in the region whilst acting as the latter’s de facto leader and as an intermediary with Europe. However, Turkmen President Gurbanguly Berdymukhammedov is its main rival.

Two years ago, Turkmenistan agreed to the rebuilding of the Caspian Coastal Pipeline, which runs from Turkmenistan to Russia through Kazakhstan but no work has yet been accomplished.

Instead, the Turkmenistan-China gas pipeline is now under construction through Uzbekistan and Kazakhstan, and a Turkmenistan-Afghanistan-Pakistan-India project is on the drawing boards. In addition, and as if that was not enough, Berdymukhammedov said he was open to feeding the Nabucco gas pipeline, which goes from Azerbaijan to the heart of Europe.

Turkmenistan has been so active that many experts doubt it can supply all the gas it said it could.

Things are still uncertain though, and contracts remain up for grabs. Following the visit to Beijing two weeks ago of the Kazakh energy minister's, Kazakhstan and Azerbaijan decided to explore the possibility of Azerbaijani gas flowing eastward under the Caspian Sea to Kazakhstan and proceeding from there to China.

What is certain is that Moscow could lose its initial monopoly and pay a price for taking advantage of the old Soviet pipeline network to impose a low energy price ceiling on its former Soviet partners.

Europe for its part must remain on guard against increased competition from China and India, both of which have energy hungry economies, and are willing to loosen their purse strings.

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West and Russia vying for allies and energy in Caucasus and Central Asia
Medvedev in central Asia for energy monopoly
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Gazprom-Central Asia deal to set off price rise
China signs economic agreements and statements of intent with Russia and Central Asian countries