Russia Keeps a Wary Eye on the Trans-Caspian Pipeline

4 MINS READNov 19, 2014 | 23:44 GMT

Amid a surge of activity surrounding the controversial Trans-Caspian pipeline, Russia chimed in on Wednesday to again signal its disapproval of the natural gas project that would link Turkmenistan to European and Turkish energy markets. In his address to the Russian Duma, Foreign Minister Sergei Lavrov reportedly said that every country has a right to choose economic partners, as long as this does not violate the interests of its neighbors. He specified that the project, which would deliver Turkmen natural gas to Europe, affects Russia's interests.

Initially proposed in 1996, the 300-kilometer (186-mile) Trans-Caspian underwater pipeline would stretch from the western Turkmen port town of Turkmenbashi across the Caspian Sea to Baku. From there, up to 30 billion cubic meters of Turkmen gas could travel along the Southern Corridor pipeline system through Georgia to Turkey and on to Europe. The amount of natural gas now transiting the Southern Corridor from Azerbaijan is rather small — 4.7 bcm, with plans to add another 10 bcm once Shah Deniz II, an Azerbaijani natural gas field, comes online in 2018.

Just a relatively small interconnector across the Caspian Sea to Turkmenistan (costing and estimated $5 billion) would enable sizable natural gas supplies to reach Turkey and Europe — particularly the Balkan states and Central European countries — and erode the dominance of Russia's exports to those markets. Consequently, Russia has been firmly against the Trans-Caspian project. In the past, Russia had little to worry about because Turkmenistan has shied away from the West, preferring to export its energy to China and via Russia. In addition, legal disputes over the Caspian maritime boundaries allow competing energy giants Russia and Iran to undermine any progress on the Trans-Caspian project. There is also the question of whether Ashgabat would ever agree to a project that Moscow is so firmly against, with Russian influence still dominant in Central Asia and given Turkmenistan's fear of the Kremlin meddling in its domestic affairs.

The Energy Situation Changes

But a string of activities surrounding the Trans-Caspian pipeline have brought the project's viability back into focus, clearly alerting the Russians. On Nov. 7, Turkish President Recep Tayyip Erdogan visited Ashgabat — his first trip to Turkmenistan as president — where Turkish and Turkmen energy firms inked a set of deals that would supply Turkmen natural gas to Turkey. Mindful of their Russian neighbor, Turkish and Turkmen leaders kept the route of the natural gas vague, but were alluding to the Trans-Caspian. The following week, Azerbaijani President Ilham Aliyev said that his country was studying routes for Azerbaijani natural gas to reach Central Europe. And on Nov. 19, during a visit to Turkmenistan, the head of the State Oil Company of Azerbaijan Republic, Rovnag Abdullayev, stated that Azerbaijan is prepared to provide the entire infrastructure needed for the Trans-Caspian pipeline. Abdullayev added that natural gas supplies from the Caspian would give security to the company's customers and energy producers alike.

Although activities regarding the Trans-Caspian have ebbed and flowed for more than a decade, the dynamics involving some of the interested parties have changed over the past year. Europe and Turkey are even more wary of Russia as a reliable (or even desirable) energy provider following increased tensions between Moscow and the West over Ukraine. Moreover, Russia is developing a strategy to diversify its exports and stop relying wholly on markets in the West, sending energy to East Asia instead.

In addition, the weight of Russian influence over its former Soviet states is shifting in lieu of the crisis in Ukraine. Each of the former Soviet states is re-evaluating whether it should continue to obey Russia's wishes. This change could make countries like Turkmenistan and Azerbaijan more brazen in moving toward launching projects, such as the Trans-Caspian, that go against Russian interests.

Russia's Response

This momentum could be why Lavrov said that Russia should be consulted on any projects concerning the Caspian. Russia technically still has the legal grounds and military power to prevent the Trans-Caspian project. However, there have been occasions where Russia has instead opted to integrate itself in an energy project rather than aggressively prevent it. For example, when Turkmenistan and China built their large natural gas pipeline, Russian energy firms constructed much of the project in Central Asia. Moreover, Russia has some control over the continued transit of Turkmen natural gas via Kazakhstan to China, because a Gazprom board member heads Kazakhstan's energy sector.

The only certainty about the future of the long-discussed Trans-Caspian pipeline is that it faces many complications. However, amid changing relations with the West and within its former Soviet turf, Russia clearly is growing more uncomfortable with the project.

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