EC Talks Gas with Turkmenistan
A representative of the European Commission (EC) has said that the decades-old Trans-Caspian pipeline idea is a “promising plan” for the European Union, but that some preconditions are needed, local media reported late October.
Erlendas Grigorovich, a representative of the EC for energy issues, said during a meeting with Turkmen president advisor on oil and gas issues, Yagshigeldy Kakaev and a World Bank representative that there are still political obstacles, but that European companies can become involved in financing and developing the project if Turkmenistan offers competitive prices, appropriate financial conditions, a good operating environment and allows European companies to become involved in its upstream sector. At the moment, the major production work is the domain of Chinese companies, which have financed field development.
Although many doubt if a pipeline will ever be built from Turkmenistan to Azerbaijan under the Caspian Sea, the EU has accelerated negotiations with Turkmenistan on the project recently. The idea has been around since 1996 and has since recurred, as a means of providing more gas to Europe through the nascent Southern Gas Corridor (SGC), a key part of the bloc's diversification strategy.
Building the 300-km Trans-Caspian pipeline is a complicated issue, not only because Turkmenistan’s major gas deposits are in the east of the country, more than 800 km away from the Caspian; but also because of potential problems from Russia and Iran.
After 22 years of negotiations, Russia, Iran, Turkmenistan, Azerbaijan and Kazakhstan signed August 12, 2018 a convention giving the Caspian Sea a ‘special legal status’.
The new convention’s Article 14 allows Turkmenistan and Azerbaijan to use their undisputed waters to construct such a pipeline based on bilateral agreements alone, but the project still has to meet environmental standards – a condition that may enable Iran and Russia to continue challenging the Trans-Caspian project in future.
The state journal Oil and Gas News reported on August 21 that “a consortium, consisting of European companies Edison Technologies, Mannesmann, Air Liquide together with the Chinese Sinopec intends to build the Trans-Caspian gas pipeline." However, French Air Liquide has comprehensively denied this report in a comment to NGW.
An industry source involved in the Southern Gas Corridor and an Azeri official have also told NGW that as of now, the two governments have not talked seriously about the issue.
However, Grigorovich said the EU has a “commitment” to the Trans-Caspian gas pipeline project. “We have expressed desire to continue work in this direction and the parties have agreed to develop a roadmap for action,” reported Turkmenistan media October 25.
Recently, Trans Anatolian pipeline (Turkish section of SGC) CEO Saltuk Duzyol told NGW that Turkmenistan remains one of three new potential suppliers for SGC expansion. The others are northern Iraq and the eastern Mediterranean.