Caspian Overview: High Hopes for Exports
Amid Georgia’s negotiations with both Russia and Iran to find the ways for its increasingly gas demands, Azerbaijan boosted gas export to this country in winter. Turkmenistan also says it is intensifying negotiations over a trans-Caspian pipeline to supply its gas to the West, although it will have to agree on using capacity in another country's export system.
Azerbaijan’s energy minister told NGE on January 29 that Azerbaijan has the capability to increase gas deliveries to Georgia during this winter to meet their demands.
He added that the ratio of Azerbaijan’s gas deliveries to Georgia in winter-summer was 60:40, but he agreed to change this ratio to 70:30, because Georgia’s gas demand in winter is growing, he said.
Azerbaijan gas supply company, affiliated to Socar, also told NGE that Azerbaijan delivered about 3.2mn m³ of gas (including the transit fee or 5% of the transited gas through Georgia to Turkey) to Georgia on January 31, about 220,000 m³ more than on the previous day. He said that Baku would supply more 50mn m³ to Georgia this winter. Last year, Georgia received 1.4bn m³ of commercial gas as well as 721mn m³ of gas as transit fee.
While removing sanctions paved the way for strengthening Iran’s position as a gas supplier in Caucasus or even boosting deliveries to Turkey, Iran’s sole gas exporter Turkmenistan says it has been intensifying negotiations over the trans-Caspian pipeline to export its gas to Europe.
Turkmenistan’ oil and gas ministry announced on February 1 that the national program on energy export diversification envisages developing new routes towards Europe as well as the east.
Russia said last month that it has stopped buying Turkmen gas while Iran, as Turkmenistan’s other gas customer, is intensively boosting both gas production and cross-country pipelines. Iran has a $6bn pipeline project, Igat 9 which is to connect the South Pars gas field to northwestern regions and if this pipeline is operational – Italian Saipem might work on it, if a letter of intent bears fruit – it will have less need for Turkmen gas.
Iran has also a $4bn pipeline project, Igat 11, which is to connect the South Pars gas field to in northeastern regions (close to Turkmenistan borders).
Each pipeline would have capacity of transiting 100 mn m³/d of natural gas.
A 300-km subsea pipeline running through the Caspian Sea to Azerbaijan can connect Turkmen gas to the Southern Gas Corridor (SGC) gas pipeline, aimed to transit Caspian gas to Europe. It would be beneficial for Georgia as well, because the more gas there is in the SGC, the more it can earn in transit fees. But there will be opposition to the project as the Caspian Sea littoral states have not yet agreed on whether that is legal or not.
Coming to Central Asia, Kazakhstan also increased gas production in 2015, eying more growth in coming years.
Kazakistan added 1 bn m³ to its yearly gas output from a field in Mangistau district, in the southwest country, with the start of it Shagyrly-Shomyshty gas field. The gas production target has been fulfilled, chief of the Mangistau district Alik Aydarbayev said during a briefing. He added that the total volume of gas extraction reached 2.5bn m³ in Mangistau district in 2015. Kazakhstan inaugurated Shagyrly-Shomyshty gas field on Febuarary 10, 2015. The field's reserves are 32bn m³.
Kazakhstan increased gas production by 5.2% in 2015, up from 45.713bn m³ in 2014, the statistics committee of the Kazakh economy ministry reported.
On the other hand, Uzbekistan announced on January 28 that it expects to see 8% more spent this year than last on developing and upgrading the gas industry. This year’s investment is planned to reach $2.798bn, according to the decree of the president Islam Karimov.
According to BP’s statistical review, the country produced 3.1mn mt of oil and 57bn m³ of gas in 2014, the latest year for which BP data are available.