Tag Archives: pipelines

Taliban to protect Turkmen pipeline

NOV. 29 2016 (The Conway Bulletin) — Apparently in a bid to win popular support from locals, the Taliban have pledged to protect major infrastructure projects planned for Afghanistan, media reported, including the ambitious TAPI gas pipeline that is being built. TAPI is supposed to run from Turkmenistan to India via Pakistan and Afghanistan. It is one of the most ambitious infrastructure projects attempted. One of its major weaknesses, its critics pointed out, was the poor security situation in Afghanistan. If they do support TAPI, the Taliban would immediately improve its prospects of success.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakhstan links two gas pipelines, boosting flows to China

ALMATY, NOV. 29 2016 (The Conway Bulletin) — Kazakhstan’s state- owned distributor KazTransGas said it had completed building a compressor station that will link two main gas pipelines and allow it to pump more gas to China, a key client for Central Asian energy producers.

The Bukhara-Bishkek-Almaty pipeline will now be linked directly to the Kazakhstan-China gas pipeline, boosting Kazakhstan’s transit capacity and securing supplies to Almaty, Kazakhstan’s biggest city. The route will allow the giant gas fields in the west of Kazakhstan to pump gas directly to China.

Dair Kusherov, deputy director of KazTransGas enthused about the options that linking the pipelines would bring.

“First, we have opened a route to export domestic gas to China, expanding our export and transport capabilities,” media quoted him as saying at the opening of the compressor station. “Second, the link will provide uninterrupted gas supplies to the city of Almaty and Almaty region. Third, the new station provides a backup route for uninterrupted gas supply to consumers in Almaty via gas pipeline bypassing the territory of the Kyrgyz Republic.”

Boosting its gas transit options eastwards also highlights China’s dominance over energy flows from Central Asia.

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(News report from Issue No. 307, published on Dec. 2 2016)

Georgia begins East-West pipeline construction

NOV. 16 2016 (The Conway Bulletin) — Georgian Oil and Gas Corporation said it started construction on a section of the East-West gas pipeline, from Tsiteli Khidi on the border with Azerbaijan to Gardabani. The company said it will invest 4.5m lari ($1.4m) to complete the 20km section. Georgia ordered a general overhaul of the 450km Soviet-era pipeline from the border with Azerbaijan to the Black Sea port of Poti. State-owned Partnership Fund is the only shareholder.

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(News report from Issue No. 305, published on Nov. 18 2016)

Kazakh oil pipeline operator to allocate its route

OCT. 18 2016 (The Conway Bulletin) – KazTransOil, Kazakhstan’s state owned oil pipeline operator, said that the first shipments of oil from Kashagan will be allocated to the Atyrau-Samara pipeline and sold at the Russian port of Ust-Luga, near St. Petersburg. Production at Kashagan re-started last week after years of delay. In October, the consortium plans to pump at 90,000 barrels/day. The Kazakh government is banking on Kashagan to propel it into the Premier League of oil producers.

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(News report from Issue No. 301, published on Oct. 21 2016)

Turkmenistan signs $700m loan deal for TAPI with IDB

OCT. 14 2016 (The Conway Bulletin) – Turkmenistan and the Islamic Development Bank (IDB) signed a $700m loan deal for the construction of the so-called TAPI gas pipeline that will pump Turkmen gas to India via Afghanistan and Pakistan.

This is an important deal, not just because of its size, but also because it brings a second major international institution into the project. Turkmenistan has been powering the project, kicking off construction in December, but, up until now, Western companies and financial institutions, other than the Manila- based Asian Development Bank, have steered away from joining it.

Now, though, after months of negotiations, the normally publicity shy Turkmen Bank for Foreign Economic Activities met up with the IDB in Washington DC to agree the loan.

Through its official news website, Turkmenistan lauded the deal.

“The construction of the transnational gas pipeline will ensure the long-term supply of energy in the countries of Southeast Asia and will ensure further economic development in the region,” it said.

For months, Turkmenistan has negotiated with IDB and other international financial institutions for loans and grants. The Asian Development Bank, adviser to the project, agreed a $200m loan in April, when it also said the project was ‘doable’.

Others have been less impressed, calling the project, literally, a pipe- dream that couldn’t be done.

And it is certainly a challenge. The plan is to build a 1,800km pipeline from Turkmenistan across Afghanistan to Pakistan and India. The cost of the pipeline is estimated at $10b.

The IDB, which is headquartered in Jeddah, has not commented on the $700m loan for TAPI.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Iran and Turkmenistan agree deal to send oil swaps to Azerbaijan

OCT. 18 2016 (The Conway Bulletin) — Iran and Turkmenistan signed a swap deal to, essentially, send 1b cubic metres of Turkmen gas to Azerbaijan every year.

The deal means that Iran will become a land bridge between Turkmenistan and Azerbaijan, potentially giving gas supplies to Europe a boost.

Under the deal, Turkmenistan will send 1b cubic metres of gas to Iran’s northern border and Iran will then deliver the equivalent to its border with Azerbaijan.

The swap deal is both an improvement for regional gas transport and an advantageous arrangement for Iran. Iran suffers from gas shortages in its north-east and supplies from Turkmenistan, besides generating transit revenues, will also help reduce this deficit.

For Turkmenistan the deal is an essential part of its diversification strategy. Turkmenistan and Azerbaijan have long touted a pipeline running across the Caspian Sea that could pump Turkmen gas westwards to Europe, as part of the wider Southern Gas Corridor network. This would secure valuable supplies from the region to Europe by giving Azerbaijan’s gas sector, which needs extra gas to fill the prospective TAN- AP-TAP pipeline network, a boost and also allow Turkmenistan to reduce its dependence on China.

The sticking point for a Caspian Sea pipeline has been Russia, though.

Russia has repeatedly said that a trans-Caspian pipeline would have to be approved by all littoral states and has, at times, threatened the use of force against unilateral decisions.

This swap deal, potentially, creates a way to send oil shipments from Turkmenistan to Azerbaijan, and then on to Europe, using Iran as a land bridge.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Kashagan to increase Kazakhstan’s oil shipments

OCT. 6 2016 (The Conway Bulletin) – Natig Aliyev, Azerbaijan’s energy minister, said that, once operational, the Kashagan offshore will increase Kazakhstan’s oil shipments to Baku to 150,000 barrels of oil/day, feeding into the Baku-Tbilisi-Ceyhan pipeline. Mr Aliyev’s statement relied on the assumption that the Caspian Pipeline Consortium, which pumps oil around the Caspian Sea to the Russian port of Novorossiysk, and the Kazakhstan-China pipeline will not be able to absorb the additional 370,000 barrels of oil/day that Kashagan will produce at its peak. Kazakhstan has slashed oil shipments from Aktau to Baku this year.

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(News report from Issue No. 299, published on Oct. 7 2016)

Azerbaijan’s Parliament passes TANAP

SEPT. 30 2016 (The Conway Bulletin) – Azerbaijan’s parliament approved a deal to build the TANAP pipeline across Turkey, a long-overdue step in the development of the project to pump gas from the Caspian Sea to Europe. An initial agreement on TANAP, a $10b gas pipeline, was signed in May 2014.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

EBRD threatens pipeline funds if Azerbaijan fails to improve transparency

SEPT. 27 2016 (The Conway Bulletin) – The EBRD said it may withhold funds for a pipeline linking gas fields in the Caspian Sea to consumers in Europe until Azerbaijan agreed to provide more transparency into its state linked energy companies.

Taking a tough stance, the EBRD, a London-based intra-governmental bank set up during the collapse of the Soviet Union to fund business and infrastructure projects, said unless Azerbaijan complied with the Extrac- tive Industry Transparency Initiative (EITI), it would withhold $1.5b ear- marked for the TANAP pipeline.

The EBRD’s stance casts fresh doubts over the Azerbaijani leadership’s commitment to transparency into its business dealings.

Riccardo Puliti, the EBRD’s managing director for energy, said that EITI, considered a global benchmark for transparency in the extractive sectors, would consider whether Azerbaijan had made progress at its next meeting in Kazakhstan in October.

“In the case of TANAP, it is important that this progress takes place. If there is no progress it will be quite difficult to justify a large amount of financing,” he told Turkish media.

Last year, the EITI downgraded Azerbaijan from ‘compliant’ to ‘candidate’ country and criticised it for a lack of transparency.

TANAP will link Azerbaijan’s pipe- line network to Greece via Turkey, forming part of the Southern Gas Corridor. SOCAR, Azerbaijan’s state- owned energy company, owns a 58% stake in TANAP, Turkey’s Botas (30%) and BP (12%) own the rest. TANAP will link with TAP which will pump the gas to Italy.

Azerbaijan has yet to react to the EBRD’s statement.

Aliya Tskhay, a researcher focus- ing on Azerbaijan at the University of St Andrews said that the EBRD may have been trying to encourage Azerbaijan to engage more closely with the EITI.

“The EBRD request seems to be an encouragement for Azerbaijan’s government to still be part of the EITI, despite a status downgrade last year,” she said.

TANAP will cost $10b to build, while TAP has a price tag of around $5b.

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(News report from Issue No. 298, published on Sept. 30 2016)

Greece says Azerbaijan’s SOCAR deal to buy gas pipelines will happen in September

JULY 22 2016 (The Conway Bulletin) — Italy’s Snam could make an offer to buy 17% of Greek gas distributor DESFA by the end of September, salvaging plans by Azerbaijan’s SOCAR to buy Greece’s pipeline network.

Earlier this month, SOCAR officials had suggested the deal, which is considered vital for Azerbaijani aspirations to supply gas to Europe, was off because a lower-than-expected

price rise by the Greece government for consumers had undermined its value.

But Stergios Pitsiorlas, chairman of the state Hellenic Republic Asset Development Fund, told Bloomberg that the Snam-SOCAR tandem will buy a 66% share in DESFA.

Snam declined to comment.

SOCAR officials flew into Athens this week to discuss the deal. News reports from both Greece and Azerbaijan have called the negotiations ‘tense’.

In 2013, SOCAR won a bid to buy 66% of DESFA, Greece’s gas distributor.

The deal was later frozen by the European Commission, citing 2009 regulation which stops integration between gas suppliers and distributors.

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(News report from Issue No. 291, published on Aug. 1 2016)