AUG. 6 2015 (The Conway Bulletin) – Turkmenistan, Afghanistan, Pakistan and India have picked Turkmengaz, the Turkmen national gas company, to lead the construction of the so-called TAPI pipeline which, they hope, will pump gas from Central Asia to the Indian subcontinent.
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(News report from Issue No. 242, published on Aug. 7 2015)
AUG. 4 2015 (The Conway Bulletin) – An explosion in Turkey on the Baku-Tbilisi-Kars-Ezurum gas pipeline has raised worries that Kurdish fighters and other factions may target energy transport infrastructure carrying oil and gas from the Azerbaijan’s Caspian Sea to Europe. Media reported an explosion on a remote section of the pipeline in east Turkey.
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(News report from Issue No. 242, published on August 7 2015)
JULY 20 2015 (The Conway Bulletin) – Statoil, the oil and gas company part owned by the Norwegian government, has decided to sell its 20% stake in the Trans- Adriatic Pipeline (TAP) project that will pump gas from Azerbaijani fields in the Caspian to consumers in Europe.
Rovnag Abdullayev, the head of Azerbaijani oil and gas company SOCAR, announced the news on Azerbaijani TV.
“Statoil has decided to leave the TAP project completely, and there is a company which is ready to buy its stake,” ANS TV quoted him as saying.
“Several companies have expressed an interest in buying Statoil’s stake, and it would be better if several companies would buy it.”
Statoil declined to comment.
If confirmed, Statoil’s decision to quit TAP is probably more a reflection on how it is
re-adjusting its portfolio rather than on the project itself. Statoil has already said it wants to reduce its exposure to risk in its portfolio and has sold its stakes in the giant Shah Deniz field in the Caspian Sea as well as in the South Caucasus Pipeline.
Stakes in these projects were snapped up by SOCAR, BP and Malaysia’s Petronas and Statoil’s stake in TAP will attract bids from companies looking for a high-profile project.
TAP is an 870km pipeline project that should link up with the Trans-Anatolian Pipeline near the Turkey-Greece border which will then carry Azerbaijani gas onto central Europe.
The current TAP shareholders are BP (20%), SOCAR (20%), Statoil (20%), Belgium’s Fluxys (19%), Spain’s Enagas (16%) and Swiss company Axpo (5%).
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(News report from Issue No. 241, published on July 23 2015)
JULY 23 2015 (The Conway Bulletin) – Many Central Asian countries have pledged their support for a deal between Iran and Western countries over its nuclear programme that will allow sanctions to be lifted. The positive feeling is mutual. In April 2015, Iran’s Foreign Minister noted that there is “no ceiling for the expansion of relations with regional countries, whether in the Caucasus or in Central Asia”.
Central Asia and Iran have already been cooperating for some time.
December 2014 saw Europe via Iran the inauguration of the new Iran-Turkmenistan-Kazakhstan railroad, linking Central Asia to Iran’s southern ports. Iran has oil swap deals with both countries.
Turkmenistan also has gas pipelines running to Iran and in 2010 Iran sent equipment to Tajikistan for the construction of the Sangtuda-2 hydro- power plant.
Increased formal, and more flexible, cooperation will certainly benefit Central Asia. Iran will give Central Asia greater access to Middle Eastern and European markets. The energy export potential is attractive, particularly given that last year Russia said it would stop buying Central Asian gas, and Turkmenistan recently accused Gazprom of failing to pay debts. Supplying Europe with gas via Iran may be more feasible for Turkmenistan. The opening up of Iran also provides another legitimate partner in the region to counterbalance Russian and Chinese dominance, as is a key aim of the region’s “multi-vector foreign policy”.
However, it will also produce new competition in the region. In August 2014, before any nuclear deal was signed, Iran announced it would no longer import gas from Turkmenistan, instead building up domestic production. Having been excluded from markets for so long, Iran will want to build up its own trade partners rather than act as a transit country for Central Asia. Moreover, more Iranian oil on the market may cause a drop in oil prices, impacting Kazakhstan at already difficult times.
One thing is certain — new transport and energy infrastructure will need to be built for any Iranian reintegration to take place. China will no doubt be looking with interest at the opportunities this presents.
By Sarah Lain, Research Fellow at the Royal United Services Institute in London
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(News report from Issue No. 241, published on July 23 2015)
JULY 23 2015 (The Conway Bulletin) – Turkmenistan’s foreign minister Rashid Meredov will travel to Afghanistan for talks with his Uzbek counterpart, media reported. Turkmenistan has become increasingly worried about the build up of Taliban forces on its borders. It also has an interest in stability in Afghanistan because of the proposed TAPI pipeline that will pump gas to Pakistan and India.
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(News report from Issue No. 241, published on July 23 2015)
JULY 23 2015 (The Conway Bulletin) – Turkmenistan hopes to complete construction of is 300km East- West gas pipeline by the end of the year, local media reported quoting government officials. The pipeline is important because it will pump gas from Turkmenistan’s fields in the east to the Caspian Sea for shipment to Europe.
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(News report from Issue No. 241, published on July 23 2015)
JULY 8 2015 (The Conway Bulletin) – Turkmenistan’s oil and gas ministry accused Russia’s Gazprom of failing to pay for natural gas it has supplied it with this year, aggravating a bitter row between the two countries.
Gazprom declined to comment. “Since the beginning of 2015, Gazprom has not paid its debts to the state corporation Turkmengaz for the volumes of Turkmen gas it supplied,” the Turkmen government statement said on its website.
“Russian company Gazprom has become insolvent on its natural gas purchase-and-sale contracts due to the continued global economic crisis and economic sanctions imposed by Western nations on Russia.”
Turkmenistan and Russia have publicly rowed before. In 2014, Gazprom slashed the amount of gas it imported from Turkmenistan to 11b cubic metres (bcm). In 2015, it planned to buy 4bcm. This is a huge drop from previous purchases. In 2008, Gazprom bought 40 bcm from Turkmenistan. And the row has also sucked in other sectors.
In 2010, Turkmenistan expelled Russian mobile phone operator MTS from the country. It later re-installed it.
The drop in Russian gas purchases has forced Turkmenistan to look elsewhere for clients. China has become its biggest client and it is trying to win contracts from the European Union.
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(News report from Issue No. 239, published on July 9 2015)
JULY 9 2015 (The Conway Bulletin) – Azerbaijan’s president Ilham Aliyev said he would welcome Italian infrastructure company Snam taking a stake in the planned Trans-Adriatic Pipeline (TAP) which will pump gas from Azerbaijan to Europe.
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(News report from Issue No. 239, published on July 9 2015)
JUNE 30 2015 (The Conway Bulletin) – Kazmunaigaz, Kazakhstan’s state-owned oil and gas company, said it would sell half its stake in the Caspian Sea Kashagan oil field to Samruk-Kazyna, the Kazakh sovereign wealth fund.
This is a curious arrangement as Samruk-Kazyna actually owns Kazmunaigas. It may be a way for Kazmunaigas, which has been badly hit by the sharp drop in energy prices, to borrow cash cheaply.
According to a press release from the London Stock Exchange, Kazmunaigas is seeking the consent of the shareholders in the North Caspian Operating Company (NCOC) , the consortium which operates the Kashagan, to sell half of its 16.88% share to Samruk-Kazyna for approximately $4.7b.
“Samruk-Kazyna’s agreement to purchase the Kashagan Shares reflects the State’s strong support of KMG (Kazmunaigas), as a strategic national asset,” the statement said.
Part of the cash raised by the sale would be used to pay $2.2b Kazmunaigas owes in fees relating to its 2013 purchase of the Kashagan stake from US company ConocoPhillips.
Kazmunaigas said that the sale would come with an option to buy back the stake in Kashagan for the same price between 2016 and 2020.
NCOC declined to comment.
Kazmaunaigas had run up large debts, partly because of the oil price slump. Halyk Bank analyst Sabina Amangeldi said in a note last month that the company already has seven Eurobond issues outstanding worth a total of $8.8b.
She also noted that lower oil prices had knocked Kazmunaigas’ revenues by around a third and that profit had been wiped out.
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(News report from Issue No. 238, published on July 2 2015)
JULY 2 2015 (The Conway Bulletin) – TBILISI — Turkmenistan’s President Kurbanguly Berdymukhamedov travelled to Tbilisi for the first time in his eight-year presidency, part of a high-profile charm offensive aimed at winning support for pumping Turkmen gas to Europe across the South Caucasus.
Georgian President Giorgi Margvelashvili welcomed Mr Berdymukhamedov at the Presidential Palace overlooking Tbilisi with red carpet and a guard of honour.
“Energy is one of the issues on which we cooperate closely. A Transit route from Turkmenistan to Azerbaijan, Georgia and Turkey has a huge potential,” Georgian media quoted Mr Berdymukhamedov as saying after the meeting. said.
Mr Margvelashvili agreed.
“Our joint transit and energy projects will make it possible to transit Turkmen energy resources to the European markets,” he said.
This year momentum has built for Turkmenistan to start sending its gas to Europe across the south Caucasus. The European Union has visited Ashgabat several times to secure promises of gas supplies from Turkmenistan and Turkmen officials have set up working groups with their Azerbaijani, Georgian and Turkish counterparts on how best to pump gas to Europe.
Europe wants to reduce its dependence on Russia for energy supplies and Turkmenistan wants to widen its client base. Currently most of its gas flows east to China.
By travelling to Tbilisi for the first time since he became Turkmen president in 2007, Mr Berdymukhamedov has sent out a strong signal of his intent.
Luca Anceschi, a professor of Central Asian Studies at Glasgow University explained.
“This meeting, marking Berdymukhamedov’s first official visit to Georgia, is an important display of Turkmenistan’s policy of maintaining an open dialogue with as many potential partners as possible,” he said.
And Georgia is important because it lies on the pipeline transit route from Azerbaijan to Turkey and then into Europe. Mr Berdymukhamedov, as he clearly has acknowledged, needs Georgian support to push gas through to Europe.
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(News report from Issue No. 238, published on July 2 2015)