A long-stalled project to deliver Turkmen gas to Europe is again in the spotlight after a European Union official said the idea remains on the table.
Denis Daniilidis, the head of the EU mission in Ashgabat, told an oil and gas conference in the Turkmen capital on November 19 that negotiators are finalizing a deal to construct a pipeline from Turkmenistan to Azerbaijan across the Caspian Sea, bypassing Russia, Russia's RIA Novosti news agency reported.
According to the diplomat, negotiators are working on "some outstanding issues,” RIA said. The EU, Turkmenistan and Azerbaijan will sign an agreement on related environmental issues this year, he added.
The trans-Caspian pipeline project is part of the EU-sponsored Southern Corridor that would deliver natural gas from Central Asia, the Caucasus and the Middle East to Europe while easing Europe’s dependence on Russian gas. Russia and Iran oppose the construction of any pipeline across the Caspian Sea, citing the unresolved status of the sea and maritime borders. But both have done little in 22 years since the breakup of the Soviet Union to remedy the issue, and both have been accused of creating obstacles to alternative energy corridors.
Turkmenistan is looking south, not west, to realize its pipe dreams.
Speaking at an annual oil and gas conference in Ashgabat last week, Turkmen officials spent a lot of time praising the proposed TAPI pipeline to south Asia. They reportedly did so at the expense of plans to construct a pipeline to export Turkmenistan’s vast gas reserves to Europe.
TAPI – named for the four countries it would cross: Turkmenistan, Afghanistan, Pakistan and India – is “regarded with suspicion as a wildly ambitious pipedream by some analysts,” AFP said, especially because it would traverse war-torn Afghanistan. Ashgabat signed onto the project at the urging of the Asian Development Bank and Washington in May. In 2008, it was estimated to cost $7.8 billion.
Turkmen officials “took every opportunity to talk up the pipeline while showing less interest in a similar project that would transport gas across the Caspian” to Europe, AFP reported:
“The realization of the TAPI pipeline project will allow an increase in exports of Turkmen gas,” President Gurbanguly Berdymukhamedov was quoted as saying in a formal statement for the conference.
Sakhatmurad Mamedov, head of the state-owned company Turkmengaz, announced that the project had been ‘successfully pushed forward’ in roadshows held in September with potential investors in Singapore, New York and London. “The realization of the TAPI project will give an impulse to the development of the countries taking part in the project and will also strengthen stability in the region as well as creating new jobs,” he said.
If -- and it’s a big if -- the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline moves from being a figment of inter-governmental imagination to being an actuality of pipe full of actual gas, Kabul stands to make a mint.
Turkmenistan stands to make a lot of money too, but not as much as it would like.
In 2008, Ashgabat was looking for $457 per ton of gas. Sources quoted by The Economic Times, an Indian business paper, however, suggested on December 13 that Ashgabat would sell gas for TAPI at a rate of $272 per thousand cubic meters (tcm). (By contrast, the rate Turkmenistan agreed for China was only $195 per tcm.)
Delhi should expect to pay $362 per tcm by the time charges and transit fees to Afghanistan and Pakistan are factored in, however. Turkmenistan wants to sell 33 billion cubic of meters of gas to India and Pakistan. Afghanistan wants to rake in transit fees ranging from a $1 billion to $1.4 billion annually. Pakistan and India want to keep gas prices for their ever growing number of consumers low and 33 billion cubic meters should just about do it.
But is the promise of $1.4 billion in transit fees enough to bring stability to southern Afghanistan, the persistently volatile area, through which the pipeline must pass? Some Afghan observers say it might be.
Others say the TAPI is just another flammable item in an explosive region.
“The situation in southern Afghanistan is no more stable now as it was when Bridas and UNOCAL were duking it out for control of the pipeline,” Candace Rondeaux, International Crisis Group’s senior analyst in Kabul, told EurasiaNet.
“Internally, of course, no one can say for certain how to stabilize Nimroz, Helmand, and Kandahar enough that work could begin on such an
Prikaspiisky Pipeline (1), East-West (3), Turkmen-China (5), TAPI (6),
A week after President Dmitry Medvedev's visited Ashgabat and Russian media gave a positive spin to his talks about the Turkmen-Afghanistan-Pakistan-India (TAPI) pipeline, the Turkmen Foreign Ministry has lashed out against Moscow's upbeat claims about the meeting.
According to a report from turkmenistan.ru, the Foreign Ministry issued a statement October 28, denying the Kremlin's version of the story of meetings between President Medvedev and President Gurbanguly Berdymukhamedov October 21-22. Ashgabat makes it clear in the frosty rebuttal that it has not endorsed Russia's participation in TAPI at all, and that any outside funders or contractors would be selected by the TAPI parties as a group.
Although Russian media portrayed both the Russia and Turkmen leaders agreeing to freeze the Prikaspiisky pipeline due to the current downturn in European demand, the Turkmen Foreign Ministry seems to take exception to this stark characterization, saying that Turkmenistan had already built its part of the pipeline -- and indicating that "apparently Russia does not wish to fulfill its commitments."
The Foreign Ministry's statement also addressed Russian Deputy Vice Premier Igor Sechin's dismissal of the Nabucco project as unworkable, and indicated that Ashgabat would pick and chose its partners and projects, including with Europe, as it pleased.
In particular, with reference to official persons of the Russian Federation, [the media] speaks about some "freezing" of the Prikaspiisky pipeline project, as well as a lack of prospects for Turkmenistan in cooperation in the Europe-oriented gas sector. At the same time, claims are made about the readiness of the Russian companies to "hook up" with implementation of the TAPI gas pipeline project.
Press Service of the President of Russian Federation, kremlin.ru
President Dmitry Medvedev and President Gurbanguly Berdymukhamedov in Ashgabat, October 22, 2010
During his visit to Ashgabat October 21-22, Russia's President Dmitry Medvedev discussed the possibility of Gazprom, Russia's state-owned gas monopoly, becoming involved in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, Russian and international wire services reported.
Kommersant, the Russian business daily, has more details. President Medvedev brought with him Vice Premier Igor Sechin, Foreign Minister Sergei Lavrov and presidential aide Sergei Prikhodko. The Kremlin is so eager to get involved in TAPI that as Sechin told Kommersant, Gazprom is prepared to take part in any capacity -- "as a contractor, as a designing company, and as a full-fledged participant of the consortium." Sechin says Gazprom is willing to invest its own money in the risky project, which would involve laying pipe across Taliban-held territory in Afghanistan and Pakistan. "Not a single investor has displayed such boldness," comments Kommersant.
Turkmenistan's President Gurbanguly Berdymukhamedov has energetically and enthusiastically promoted TAPI in recent months, bringing the TAPI ministers together at meetings in Ashgabat in anticipation of a December meeting of heads of state to finalize an agreement. The parties announced that they were prepared to bid out the job of building the pipeline to a "global energy giant"-- which was not specified, although analysts were oriented toward expecting a Western energy company.
Russia's interest in TAPI could be motivated by reluctance to see Turkmenistan bypass Moscow-dominated energy corridors to sell gas to the West, says Kommersant. Russia is said to have lost interest in the Iran-Pakistan-India (IPI) pipeline, which
Energy ministers from the four countries involved in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline have now decided to invite a "global energy giant" to bid on implementation of the project, the Hindu Times and other India media reported this week.
Turkmenistan has been aggressively pursuing its neighbors in recent months to close the deal on the pipeline to run from the Dovletabad gas fields in the southeast of Turkmenistan through volatile territory in Taliban-held regions in Afghanistan and Balochistan in Pakistan to India. Analysts have speculated that Turkmenistan has been driven by a need to find new customers to pay for its gas, to make up for a sharp reduction in purchases by Russia's Gazprom, following price disputes and a drop in world demand last year.
At the meeting of heads of states at the UN General Assembly last week, Ashgabat mounted an ambitious five-part peace proposal making TAPI central to a concept of Afghan reconstruction, to be achieved through UN-sponsored peace talks among the Afghan parties hosted in Turkmenistan. President Berdymukhamedov offered trade, humanitarian aid, and technical assistance in capacity-building, expressing hope that the construction of TAPI as well as a railroad would bring trade, jobs and ultimately stability to the region.
Last week, the energy ministers of the four countries met in Ashgabat to sign a framework agreement for the pipeline, and heads of state are slated to meet in either December or January 2011 to finalize the arrangements.