Turkey hunts Turkmen gas for TANAP

By bne IntelliNews September 4, 2012

bne -

Turkey confirmed on September 3 that it hopes to add Turkmen gas to the planned TANAP pipeline. A deal would see the Turkish project revitalizing the EU's "southern corridor" plan to feed Caspian gas to Europe while bypassing Russia. However it will need to navigate its way across the Caspian Sea.

Ankara and Ashgabat have been deepening ties for some time, so a potential deal to fill the planned eventual 60bn capacity of the $7bn Trans-Anatolian pipeline is not a shock. Turkish Energy Minister Taner Yildiz said: "With the TANAP project we have created a structure that will allow gas to transit across Azerbaijan and facilitate trade. This structure is also targeting Turkmen gas."

The minister's comments were made from the Turkmen capital over the weekend, according to Reuters, where his meetings with Turkmen officials were also attended by European Energy Commissioner Guenther Oettinger and Azeri Energy Minister Natik Aliyev. While the original idea for the EU-backed Nabucco pipeline - the former leading edge of the "southern corridor" project - to stretch from Austria to the Caspian has fallen by the wayside, TANAP now looks to be stepping in to create a link from the Caspian to the border of Europe.

The first phase of the Turkish pipeline is planned to carry 16bn cubic metres from Azerbajan's giant Shah Deniz II gas field to the Bulgarian border, at which point it will be met by either the Trans-Adriatic Pipeline (TAP) running to Italy, or the shortened Nabucco West headed to Austria. However, TANAP has greater ambition, and is planned to reach annual capacity of 60bn cm, but requires additional resources to the Azeri flows.

Ankara has been pushing to become a key importer of Turkmen gas for some time, especially given the ongoing arguments with Russia - its largest supplier - over prices. Meanwhile, Turkey faces several challenges elsewhere in the region, with US sanctions suppressing trade with Iran, intra-regional difficulties blighting Iraqi relations, and the Syrian crisis.

At the same time, Turkmenistan is keen to diversify its export routes. Until 2009 it was totally reliant on Russian infrastructure, which saw it sell its gas at low prices to Gazprom, only for Moscow to pass it on to European customers at hugely increased prices. It is now plugged into China via a Central Asian route, but still needs further options to leverage its huge reserves, which are estimated to be the fourth largest in the world. It is even pushing a plan to route a pipeline through Afghanistan to supply India and Pakistan.

"Turkmenistan gas cannot stay out of the region's gas movement ... We talked about how the Turkmen gas could be included in this project within the frame of energy security," Yildiz said, according to Anatolia News Agency after a separate meeting with Turkmen President Gurbangulu Berdimuhammedov.

The Turkish energy minister also said that the EU is keen on the plan, while a spokesperson for Ottinger told Reuters that the EU is waiting for a guarantee from Turkmenistan on supply. However, the spokesperson suggested that Brussels is wary of getting itself tangled up in the complex issues surrounding the Caspian Sea, suggesting the EU will neither own such a pipeline crossing beneath the water nor pay for it.

The major obstacle for Central Asian gas flows to Europe, a trans-Caspian pipeline is not a new idea. However, the five littoral states - Turkmenistan, Azerbaijan, Russia, Kazakhstan and Iran - have been bickering over demarcation and rights for years, and are yet to approach any solution. Yildiz however claimed that a route for a pipeline project could be agreed by Turkmenistan and Azerbaijan without contradicting the political status of the sea. He also added hinted that private companies could be involved in the project.

Notice: Undefined index: social in /var/www/html/application/views/scripts/index/article.phtml on line 259

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more