Global Courant
The Trans-Caspian gas pipeline is back on the drawing board, but it is unlikely to supply Europe with gas. After the failure of the second attempt to realize the project in the late 2010s – partly due to domestic political influence exerted by the inherited Soviet-era monopoly Georgian Oil and Gas Corporation (GOGC) – it seemed as if the TCGP had swung and missed again.
The only previous attempt to build it was in the late 1990s. It fell due to two circumstances.
The first was the agreement on the Blue Stream pipeline as long as gas to Turkey (which the TCGP could possibly have done) from Russia under the Black Sea. The second was the unexpected discovery of large quantities of gas instead of oil in Azerbaijan’s offshore Shah Deniz deposit. These volumes eliminated the need to rely on gas from Turkmenistan to fill a pipeline from Azerbaijan west to Europe.
It is worth mentioning the attempt to build a pipeline of such a large volume in the late 2000s. This was the Nabucco project, which would have run from the South Caucasus to the Baumgarten gas hub in eastern Austria. However, this gas was intended to come primarily, if not exclusively, from offshore Azerbaijani sources that had recently been discovered and from others (such as Shah Deniz) that were expected to be expanded.
It is a sign of the difficulties in the trans-Caspian gas field that the TCGP was not considered part of this plan, which included the European Union’s attempt to create a Caspian Development Corporation (CDC) to total demand from European gas companies.
However, that demand turned out not to exist because the major European companies concerned had other suppliers – including Gazprom – and the CDC’s institutional design was poorly implemented.
The pipeline plan resurfaces
There has been talk of a TCGP again for some time now. This is notBut the full-fledged pipeline of 31 billion cubic meters per year (bcm/y) from country to country, which was originally envisioned 25 years ago. It is a smaller, shorter pipeline from Turkmenistan’s offshore gas production platforms to Azerbaijan’s offshore gas production platforms.
It was first proposed shortly after Turkmenistan’s first president Saparmurat Niyazov died in 2006, with a volume of 10 billion cubic meters per year. It could have become part of the project just mentioned in the late 2000s.
Turkmenistan has never supported this project. If Turkmenistan ever wanted to build this smaller pipeline, it could have done so at any time in the last fifteen years. However, for reasons of both policy and prestige, the country has stuck with the full-fledged 31 billion cm3 per year land-to-coast pipeline.
However, diplomatic and other disagreements between Turkmenistan and Azerbaijan, Russian military dominance in the region and the lack of a treaty defining the legal status of the Caspian Sea all blocked the project.
It is this project that has now resurfaced in the past two years, under the sponsorship of an initiative organized by former US Ambassador (2014-2019) to Turkmenistan Allan Mustard, who has formed for this purpose the private, Florida-based company TransCaspian Resources Inc.
The estimated volume for this smaller pipeline would be 8-10 billion cubic meters per year. The offshore deposit in Turkmenistan is developed by the Malaysian company Petronas and is no longer “stranded”, but is instead connected onshore to Turkmenistan’s domestic gas distribution system.
Turkmen President Serdar Berdimuhamedov completed a working visit to Hungary this summer, where an agreement in principle on gas imports was reached. However, Hungarian Foreign Minister Péter Szijjártó insisted that this involved the construction of the original 31 billion cm3 per year coast-to-coast pipeline. This implies a resuscitation of the old Nabucco project with its pipeline to Austria.
That coast-to-coast pipeline is the one about which Szijjártó made his public statement. An entirely new infrastructure would be needed from Azerbaijan to Europe, parallel to the existing Southern Gas Corridor. Work would also need to be done in South-East and Central Europe before the gas would reach consumers.
Turkmenistan al completed A few years ago, the East-West Pipeline (EWP) was built through the south of the country from the large gas reserves there. Some technical work still needs to be done to prepare it for gas passage, such as most likely the installation of compressors.
Nevertheless, the EWP itself exists and its terminus is not far from the coast of the Caspian Sea. The construction of the full-fledged shore-to-shore TCGP itself is technically simple, as it is only 300 kilometers long and can be constructed across a known shallow underwater ridge between the two countries. It would be the way for Europe to receive 31 billion cubic meters of gas per year from Turkmenistan.
It is therefore significant that, just days after Hungary’s non-binding memorandum of understanding with Turkmenistan on future gas imports, Szijjártó also signed similar MoUs with Azerbaijan and Turkey for similar amounts of gas imports. These countries are much closer and already export gas to Europe. Their domestic petrochemical industries are well developed and technically highly competent, unlike those of Turkmenistan.
It is expected that this fall Berdimuhamedov will visit Brussels, where the EU leadership will try to convince him in favor of the shorter and smaller-scale American “platform connection project”. You shouldn’t expect anything to come from this. It is Azerbaijan that will supply European gas from the Caspian Sea region in the near future, and in increasingly larger quantities.
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