by Isabel Gorst
04-05-06
A proposed gas pipeline from central Asia across
the Caspian Sea to Europe will get an important boost when Dick Cheney, US vice
president, meets Nursultan Nazarbayev. Mr Cheney will seek to enrol Mr
Nazarbayev’s support for a scheme to bring Kazakh gas to Azerbaijan to join a
new line to Turkey -- ending Russia’s stranglehold on gas export routes out of
landlocked central Asia.
During talks with Mr Nazarbayev, Mr Cheney will try to give a “big nudge” to oil
and gas corridors linking Kazakhstan with Europe while “planting a big American
flag in central Asia,” said Glen Howard, the head of the Jamestown Foundation
think-tank.
“We are flexing our muscles a little bit,” Mr Howard added.
The plan is one of a flurry of new pipeline schemes spanning central Asia and
the Caucasus that are the counters in a geopolitical chess game playing out
between the US, Russia and China for control over one of the world’s last
undeveloped oil and gas basins.
Mr Cheney’s visit to Kazakhstan, coming hard on the heels of a trip to the White
House by Ilham Aliyev, the president of Azerbaijan, underscores the strategic
importance to the US of central Asia and the Caucasus at a time of increasingly
strained ties with Russia.
Kate Hardin, Cambridge Energy Research Associates director, said that “Europe
and the US took a second look at the map” in central Asia after the crisis in
January when Gazprom, the Russian natural gas giant, temporarily shut off gas
supplies to Ukraine.
Mr Aliyev spent three days in Washington, stressing the importance of Azerbaijan
as a reliable, secular Muslim ally that could offer oil and gas to Europe
without being beholden to Russian transit routes. The US promoted construction
of parallel oil and gas pipelines from Azerbaijan across Georgia to Turkey. Both
will start up this year, marking a major strategic gain for the US in the
Caspian energy arena.
Limited marketing opportunities exist in Turkey which has committed to import
more gas than it needs from various sources, including Russia. But the broader
plan is to establish Turkey as a transit highway to Europe, where Caspian gas
will compete head-on with Russian supplies.
Gazprom’s strategy is identical -- and it is ahead in the game. Vladimir Putin,
Russian president, last November announced plans to expand a pipeline Gazprom
built across the Black Sea to Turkey in 2003, that could provide extra supplies
to southern Europe and Italy. Gazprom’s new advance from Turkey, combined with
another planned export route across the Baltic to northern Europe, would create
a ring of pipelines around the continent that Gazprom’s detractors regard as a
noose.
With oil and gas export routes now established from Azerbaijan that exclude
Russia, the US is shifting its focus to trying to offset Russian dominance over
exports from Kazakhstan.
This is the second US attempt to bring central Asian gas into Europe. Lengthy
negotiations over a scheme to pipe gas from Turkmenistan across the Caspian to
Azerbaijan broke down in the 1990s mainly because Saparmurat Niyazov, the
authoritarian Turkmen leader, kept changing the terms. US energy officials now
regard Turkmenistan, the central Asian republic with the biggest gas reserves,
as “a lost cause”.
But there were other barriers to the Turkmen project that could rear their
heads again. Russia claims Caspian subsea pipelines are environmentally
unacceptable. Azerbaijan is reluctant to share access to the limited Turkish
market with competitors from central Asia. However, investors’ misgivings about
the high cost of offshore pipeline construction have evaporated against a
backdrop of record oil and gas prices and frenzied concern about energy
security.
Jonathan Stern, director of gas research at the Oxford Institute for Energy
Studies said: “With $ 60 oil these pipelines are affordable. If you don’t build
a pipeline you are not in the game.”
A trans-Caspian gas pipeline would fit with Mr Nazarbayev’s strategy to
diversify Kazakh energy export routes. But the president is expected to keep all
options open rather than commit to a project that would tip the delicate balance
of Kazakhstan’s energy relations with the US, Russia and China.
Russia would object to any pipeline that eroded its monopoly over central Asian
gas export routes. Gazprom’s strategy is to import growing volumes of central
Asian gas to feed its low-price domestic market, thereby freeing up its own
production for sale to more lucrative European customers.
China is also competing for central Asian gas and is willing to commit huge
sums to pipeline projects. Kazakhstan proposes to build a gas line to China that
could eventually serve as a transit hub for central Asian exports moving east to
feed the world’s fastest growing energy consumer.
Privately, Kazakh energy officials admit that the appearance of alternative gas
pipeline proposals on the board may coax more generous export terms out of the
Russians.
Source: news.ft.com