Kazakh Expert Notes Significance of Russian-Kazakh-Turkmen Gas- Pipeline Project

An expert from the Kazakh Institute for Strategic Research, Gulnur Rakhmatulina, gives some details of a Russian-Kazakh-Turkmen gas pipeline project for delivering gas from Central Asia to Russia along the eastern coast of the Caspian Sea. The following is an excerpt from Gulnur Rakhmatulina’s interview “Oil and gas: for them and for us”, published by the newspaper Argumenty i Fakty Kazakhstan on 6 February; a subheading as published:

On the eve of the Near Year, the presidents of Russia and Kazakhstan, Vladimir Putin and Nursultan Nazarbayev, (with participation of their Turkmen colleague, Gurbanguly Berdimuhamedow, over the phone) agreed on the construction of a pipeline from Turkmenistan to Russia along the eastern coast of the Caspian Sea.

A senior researcher of the Kazakh Institute for Strategic Research under the president of Kazakhstan, Candidate of Economics Sciences Gulnar Rakhmatulina, is answering AiF Kazakhstan’s questions about the details of the project.

An old friend is better than two new ones

[Gulnar Rakhmatulina:] According to preliminary the facility costs a minimum of 1bn dollars. Though, some experts believe that the figure has been lowered. One can say with more confidence that the length of the pipeline is 1,745 km. Of them 605 km will be laid on the territory of Turkmenistan, and the remaining 1,140 km on the territory of Kazakhstan. The pipeline will be linked to the existing line Central Asia Tsentr. The latter it seems will undergo radical reconstruction.

[AiF Kazakhstan:] The West has perceived the news, to put it mildly, without enthusiasm, saying to the effect that the two Central Asian countries that are rich in hydrocarbons have been yet more tightly gripped by the Russian bear. Moreover, the West hoped to draw the two countries’ attention to the construction of a quite different gas pipeline under the bed of the Caspian Sea… [ellipsis as published].

[Gulnar Rakhmatulina:] The agreement signed in Moscow on 20 December 2007 has great significance for the Central Asian states. The export and transit potentials of these countries have significantly increased. Both experienced Nursultan Nazarbayev and new-comer in politics Gurbanguly Berdimuhamedow have decided to establish more close relations with Russia, following the wise proverb “An old friend is better than two new ones”.

It is planned that the new pipeline’s throughput capacity will reach 20bn cu.m. of natural gas a year. When the pipeline is commissioned, supplies of the Central Asian gas to Europe via Russia will increase from 55 to 85bn cu.m. of gas. Here it would be silly to deny that the agreement is another victory of the Russian diplomacy. Russia is slowly but steadily restoring its control over energy resources in Central Asia which it lost in the 1990s.

[AiF Kazakhstan:] Has Kazakhstan given its consent to construction a pipeline under the bed of the Caspian Sea?

[Gulnar Rakhmatulina:] What is known is that there were talks on this issue, which does not contradict the multi-vector energy policy of our country. However, the final decision has not yet been taken.

[Passage omitted: known details of the project]

All the same, the construction of the pipeline across the Caspian Sea is still on the agenda of the present day because our European friends’ demand for natural gas is increasing every year. It has been calculated that by 2015 the European Union will consume up to 700bn cu.m. of natural gas every year (the figure is now 530bn).

[AiF Kazakhstan:] Now the question is about oil. Kazakhstan decided to take part, though after some hesitations, in the Atyrau- Baku-Ceyhan project. But this pipeline bypasses Russia… [ellipsis as published]

[Gulnar Rakhmatulina:] Russia is demonstrating a pragmatic approach in this issue. It takes an understanding view of our country’s participation in the project because any pressure would have been counter-productive. One may loose more than gain. Moreover, trade between the two countries is growing. Though we have not yet the final figures, experts believe that the figure will be at least 16bn dollars for 2007. So why damage neighbourly and, most importantly, mutually advantageous relations? On the whole it should be noted the Caspian [gas] project is a logical continuation of the Kazakh-Russian integration in the oil and gas sector. Our countries are jointly developing a deposit near the sea border, using the Tengiz-Novorossiysk pipeline, reconstructing an oil pipeline to Samara and setting up joint enterprises on developing Karachaganak [gas deposit].

[AiF Kazakhstan:] As for oil, then the policy is more or less understandable. We sent oil to Russia and Iran in keeping with the system of exchange; we also export oil to China. But, natural gas only goes to Russia… [ellipsis as published]

[Gulnar Rakhmatulina:] Our country has far less gas than oil. Suffice to say that in 2007 we were forced to import 4.2bn cu.m. of gas. Of this, 54.9 per cent came from Russia, 28.9 per cent from Uzbekistan and 16.2 per cent from Turkmenistan.

[Passage omitted: background on Russia's Gazprom; Kazakh energy minister recently proposed to introduce a tax on extraction of hydrocarbons; Kazakhstan extracted about 30bn cu.m. of gas in 2007]

Originally published by Argumenty i Fakty Kazakhstan, Almaty, in Russian 6 Feb 08 p5.

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