AUG. 8 2014 (The Conway Bulletin) – The TAPI gas pipeline that is planned to run from Turkmenistan through Afghanistan to Pakistan and India is already influencing regional trade links. At a meeting in Ashgabat to discuss progress on the project, Pakistan and Turkmenistan also agreed to improve bilateral ties.
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(News report from Issue No. 195, published on Aug. 13 2014)
JUNE 14 2014 (The Conway Bulletin) – European Commission president Jose Manuel Barroso visited Baku in a strong show of support for strengthening relations with Azerbaijan.
Mr Barroso pledged not only the EU’s full support for the Southern Corridor, an energy transit route from the Caspian Sea, but also support for a pact to further push Azerbaijan towards Europe.
Europe’s main motivation for the Southern Corridor — hinged around a gas pipeline linking the Caspian Sea to central Europe — is to reduce its reliance on Russia for its gas supplies. Azerbaijan’s motivation is to link directly to a major client.
But talk of another deal moves EU-Azerbaijan relations on to another level. Potentially, at least.
“We held a very successful meeting with President Ilham Aliyev, and made important decisions, one of which was to hasten the completion of a new agreement between Azerbaijan and the EU,” media quoted Mr Barroso as saying.
Russia is likely to look poorly on any move by Azerbaijan to integrate more closely with Europe. Just as with Ukraine and Georgia, Russia considers Azerbaijan to be part of its patch.
Three days after Mr Barroso’s visit to Baku, Russian foreign minister Sergei Lavrov flew into town for bilateral talks. He is sure to make this point to the Azerbaijani leadership.
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(News report from Issue No. 189, published on June 18 2014)
JUNE 11 2014 (The Conway Bulletin) – Kazakhstan’s lower house of parliament ratified a deal that will increase the amount of Russian oil pumped through Kazakh pipelines to China to 10m tonnes per year from 7m tonnes per year. The deal highlights Kazakhstan’s role as a oil transporter, and not just a producer, to China.
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(News report from Issue No. 189, published on June 18 2014)
JUNE 10 2014 (The Conway Bulletin) – Replacing two corroding 90km-long gas pipelines at the Kashagan oil field in the Kazakh sector of the Caspian Sea will cost “several billion dollars” and delay the re-start of production until at least 2016, the Wall Street Journal reported quoting a person familiar with the project.
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(News report from Issue No. 188, published on JUNE 11 2014)
JUNE 2 2014 (The Conway Bulletin) – The third branch of a gas pipeline running from Turkmenistan, through Uzbekistan and Kazakhstan to China opened on May 31, media reported. Line C, as it is known, will double the pipeline’s capacity to 55b cubic metres of gas per year by 2015. Gas exports to China are vital to Central Asia’s economies.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 30 2014 (The Conway Bulletin) – Turkish Petroleum Corp., the state-owned Turkish oil energy company, agreed to buy an extra 10% stake in the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea from France’s Total for $1.5b.
This means that Turkish Petroleum now owns 19% of the Shah Deniz and is Azerbaijan’s second biggest partner in the project, behind BP.
The deal shifts the energy power vertical in the region as it reduces Turkey’s reliance on Russia for supplies while increasing its dependency on Azerbaijan.
Turkey is a NATO member and with the stand-off over Ukraine continuing, shifting energy reliance away from Russia is, undoubtedly, a sensible strategy. And who better to turn to than Azerbaijan? Turkey and Azerbaijan are ethnically, culturally, politically and linguistically close. They make natural allies.
For Azerbaijan the deal is an important one as Turkey’s entry into the Shah Deniz project is a massive show of faith in its prospects. It is being upgraded in an important second phase. Turkey is also a major stake holder in the TANAP pipeline that will pump gas from the Caspian Sea to Europe.
Azerbaijan-Turkey relations have always been close, although over the past few years these have grown even closer. Azerbaijan has now established itself as a major gas supplier to Europe and it is only natural that it works increasingly closely with Turkey to secure this sector.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 2 2014 (The Conway Bulletin) – Azerbaijan may reduce its 58% stake in the TANAP gas pipeline project that will run from the Caspian Sea to Europe, the chairman of SOCAR, Azerbaijan’s state energy company, Rovnag Abdullayev, said. TANAP is currently one of the world’s biggest pipeline projects.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 28 2014 (The Conway Bulletin) -Bangladeshi officials travelled to Ashgabat to lobby their of the proposed Turkmen counterparts to accept them as part TAPI gas pipeline, media reported.
Their mission to Ashgabat underlines just how important Turkmenistan has become for the region’s energy supply chain.
TAPI is an ambitious project that could transform the energy balance in south Asia. The plan is simple and audacious. Pakistan and India both need more energy. Turkmenistan can supply it and TAPI will connect it to the market.
The difficulty is building a safe and reliable pipeline across Afghanistan.
Even though the plan is still only a potential, Bangladesh has said it also wants to sign up for it.
“We have conveyed our interest to join with TAPI as we are struggling to meet mounting natural gas demands with local production,” Petrobangla, Bangladesh’s state-owned energy company, chairman Hussain Monsur was quoted by Platts as saying.
Adding Bangladesh to the list of countries participating TAPI will add more weight and validity to it.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 23 2014 (The Conway Bulletin) -Georgia has resumed supplying gas to Armenia through its north-south pipeline after a rock fall earlier this month damaged it, Gazprom- Armenia said. The pipeline from Russia through Georgia is the main supply route to Armenia. Rock falls, though, are a problem and can trigger shortages each year.
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(News report from Issue No. 186, published on May 28 2014)
MAY 28 2014 (The Conway Bulletin) – The consortium of companies developing the second phase of the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea handed out another major contract.
This time it was a $735m contract to build two sections of a pipeline that will pump gas to Europe. This is an important project both for Azerbaijan and for Europe which is looking to reduce its dependency on Russia for energy.
A joint bid by Azeri firm Azfen and Amsterdam-based Saipem Contracting Netherlands BV won the contract to build a 428km pipeline between Azerbaijan and Georgia and a second 59km pipeline in Georgia.
Earlier this year the BP-led consortium developing Shah Deniz II, as the second phase of the development is known, handed out contracts worth billions of dollars, including also to Saipem, an Italian oil and gas services company.
And there promises to be plenty more multi-million- dollar contracts. Shah Deniz II is one of the biggest infrastructure projects in the world. Its entire cost is estimated at $28b.
Reuters quoted Gordon Birrell, BP’s president for the Azerbaijan-Georgia-Turkey region as saying that the development of the South Caucasus Pipeline Expansion was on schedule.
Most of the contracts are due for completion by 2017, with first gas scheduled for a year later.
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(News report from Issue No. 186, published on May 28 2014)