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)
JUNE 30 2015 (The Conway Bulletin) – The Kazakh Central Bank bought a 10% stake in Kazmunaigas from the country’s sovereign wealth fund Samruk Kazyna for 750b tenge ($4b), a move analysts said was designed to help the state- owned energy company pay off debts generated by a sharp fall in oil prices.
This is the second reorganisation of Kazmunaigas since June. It earlier announced the sale of half its 16.8% stake in the Kashagan oil project to Samruk-Kazyna for $4.7b.
Analysts at Halyk Bank, a Kazakh bank, said the latest move shifted debt once again from Kazmunaigas to Samruk Kazyna to the Central Bank.
“If the first transaction raised the net debt of Samruk-Kazyna, the second lowered Samruk- Kazyna’s net debt, and the credit risk. By divesting of Kazmunaigas, Samruk-Kazyna reduced the most expensive part of its debt,” Halyk Finance senior analysts Sabit Khakimzhanov and Gulmariya Zhapakova said in a note to clients.
Delays at Kashagan and a sharp fall in oil prices have worsened Kazmunaigas’ financial affairs.
But, although unprecedented, the Central Bank’s purchase will change little in Kazakhstan’s oil sector. The two transactions may have helped Kazmunaigas achieve a better financial position in the short term, but both moves are temporary.
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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 22 2015 (The Conway Bulletin) – SOCAR, the Azerbaijani state- owned oil and gas company, resumed oil exports to Russia after a break of several weeks, Rovnag Abdullayev, the SOCAR chairman, was quoted by media as saying. No reason was given on why exports were resumed.
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(News report from Issue No. 241, published on July 23 2015)
JULY 22 2015 (The Conway Bulletin) – Iran could export refined oil products to Kazakhstan, Vahid Ahmadi, the Iranian deputy science minister, told media. This is important because Kazakhstan is looking for ways to boost its supply of oil-based products.
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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)
Indian PM Narendra Modi travelled to Turkmenistan as part of this grand tour of Central Asia and urged for progress on a gas pipeline that will pump Turkmen gas to India to be accelerated.
TAPI, the name of the pipeline, is due to select its consortium leader on Sept. 1 and Mr Modi told Turkmen leader Kurbanguly Berdymukhamedov that he wanted the construction phase to begin soon.
“The most significant initiative in our relationship is the TAPI Gas Pipeline,” he said in a statement released to the media. “This could transform regional economic cooperation and bring prosperity along the route. We welcomed the agreements between the four countries for the pipeline. We underlined the need to implement the project quickly.”
The TAPI project is ambitious. It envisions a route across Afghanistan and Pakistan to India.
And Mr Modi appeared aware of the potential problems this route could encounter.
He also suggested that, if there were problems, a land-sea route via Iran could be used to ship gas to India from Turkmenistan.
TAPI is slated to cost around $10b and to run for 1,800km.