Tag Archives: pipelines

Turkmen president calls for TAPI to speed up

APRIL 12 2014 (The Conway Bulletin) — It appears that Turkmen president Kurbanguly Berdymukhamedov is in a rush to start on the so-called TAPI pipeline that planners hope will carry gas from Turkmenistan across Afghanistan to south Asia.

The pugnacious Mr Berdymukhamedov said that work should begin on the pipeline in 2015, an ambitious timeframe in anybody’s books.

TAPI has been talked about for a few years. The US and others see the pipeline as a way of locking in Afghanistan, and to a lesser extent Pakistan, into the global energy network.

Once the notoriously restless and fractious Afghanistan is a stakeholder in this system, the thinking goes, stability will be more appealing.

And Turkmenistan is the perfect gas supplier. Stable and with ample supplies, Turkmenistan is keen to exploit its reserves and increase its client list, as Mr Berdymukhamedov’s haste betrays.

The problem is that although Turkmenistan may be ready to begin this ambitious 1,735km project, Afghanistan and Pakistan are far less ready.

Afghanistan is currently midway through a complex presidential election and is facing the prospect of a security vacuum once NATO forces withdraw this year.

The $8b project has enough support from international donors and from Western nations to push it forward. Turkmenistan, which is looking to boost its client base, needs to be patient.

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(News report from Issue No. 180, published on April 16 2014)

Russia sanction could hit Kazakhstan

APRIL 15 2014 (The Conway Bulletin) — The fallout from Ukraine’s revolution and the ensuing standoff between Russia and the West has created a headache for Kazakhstan.

If relations fray further the US and the EU may impose trade sanctions on Russia and these will impact Kazakhstan.

But the Kazakh energy sector is probably more robust than energy minister Uzakbai Karabalin made out last week.

Kazakhstan relies heavily on Russia as a transit country for its oil and it may have to find alternative export routes, but those routes do exist. This might include sending oil south, through Iran to the Persian Gulf.

Around a third of Kazakhstan’s oil exports flow through the Caspian Pipeline Consortium (CPC) which owns the pipeline running from Atyrau in western Kazakhstan to Novorossiysk on Russia’s black Sea coast.

At first glance it looks as if any sanctions on Russia would hit CPC — the pipeline crosses Russia and feeds into a Russian mix of oil. But the CPC has international status and should, in theory, be exempt from sanctions.

Kazakhstan now also exports much of its oil to China, across the Caspian Sea and through the South Caucasus. Mr Karabalin’s concerns about the impact on Kazakhstan’s domestic oil-products market from a sanctions hit Russia also feels slightly overblown.

Kazakhstan has a shortage of refinery capacity and has to import oil products from China and Russia. This has been expensive and has threatened to push up prices.

If the West did impose sanctions on Russia and it did flood Kazakhstan with oil products, prices would drop.

Kazakhstan and the rest of Central Asia are exposed to Russia’s economy. If, under the weight of threatened sanctions, it stutters, so too does Central Asia. Kazakhstan’s energy sector, though, is more sheltered.

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(News report from Issue No. 180, published on April 16 2014)

Kazakhstan increases pipeline exports

APRIL 1 2014 (The Conway Bulletin) — Oil exports via the Caspian Pipeline Consortium (CPC) that runs from Atyrau in western Kazakhstan, north of the Caspian Sea into Russia and on to the Black Sea port of Novorossiisk expanded by 24% in March from a year earlier after a successful capacity upgrade.

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(News report from Issue No. 178, published on April 2 2014)

China wants to build pipeline through Tajikistan

MARCH 11 2014 (The Conway Bulletin) — China’s state-run energy company CNPC set up a firm with Tajikistan’s Tajiktransgas to build a fourth branch of a pipeline pumping gas from Turkmenistan to China. China now dominates energy exports from Central Asia. Tajikistan will received a fee for hosting the pipeline.

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(News report from Issue No. 175, published on March 12 2014)

KazTransGaz receives Chinese loan

FEB. 27 2014 (The Conway Bulletin) — Kazakh state-owned pipeline monopoly KazTransGaz agreed to take a $700m loan from the China Development Bank to build a second 311km gas pipeline from southern Kazakhstan to China. The loan highlights the dominance of Chinese finance and its hunger for gas in Central Asia.

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(News report from Issue No. 174, published on March 5 2014)

Russia offers Azerbaijan a discount for oil transit

FEB. 24 2014 (The Conway Bulletin) — Looking to boost the flow of oil through its Soviet-era Baku-Novorossiisk pipeline, Russian pipeline monopoly Transneft has offered Azerbaijan a reduced price for using the route, media reported.

Azerbaijan and Russia have been arguing about the price of oil shipments through the Baku-Novorossiisk pipeline over the past few years. Last year, as the row intensified, Russia said it would close the pipeline altogether.

The root cause of the problem is that Azerbaijan has increased the number of export routes it has serving its energy producing fields in and around the Caspian Sea.

Under a 2013 deal Azerbaijan was supposed to pump 5m tonnes of oil through the 1,330km Baku-Novorossiisk pipeline every year at a cost of just under $16/tonne. This volume never happened and the through-flow of oil from Baku to Novorossiisk dropped to about 1.75m tonnes.

At this volume, Transneft had said it would charge $21/tonne of oil, a price the Azerbaijanis quickly rejected.

The row over oil deliveries from Baku to Novorossiisk has strained relations between the two countries. Azerbaijan has still to respond to Russia’s new offer.

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(News report from Issue No. 173, published on Feb. 26 2014)

Azerbaijan expands Georgian pipeline

FEB. 17 2014 (The Conway Bulletin) — Azerbaijan’s state oil company SOCAR said that it was expanding its pipeline network in Georgia by 750km. This expansion, the company said, would boost its customer base by 22,000. SOCAR currently operates 1,179km of gas pipeline in Georgia and has 37,500 subscribers.

(News report from Issue No. 172, published on Feb. 19 2014)

Iraq looks to Azerbaijan for gas transit

FEB. 10 2014 (The Conway Bulletin) — Azerbaijan underlined its credentials as a regional energy transport lynchpin by offering to pump Iraqi gas to Europe through its pipeline network.

The offer came during a trip to Baghdad by Azerbaijani foreign minister Elmar Mammadyarov and underlines the importance of the so-called Southern Gas Corridor.

“The project is there, so if there are other countries that want to join the Southern Gas Corridor, including Iraq which has already expressed some interest in this project, we are ready to start negotiations,” the AFP news agency quoted Mr Mammadyarov as saying.

Azerbaijan is planning a massive boost to its gas extraction and pipeline infrastructure over the next few years to cope with a rise in gas exports. This means developing the Southern Gas Corridor and attracting partners to tap into it.

Iraq is, of course, trying to boost its gas exports since the end of the US-led war and has turned to Azerbaijan for help.

To make the deal go through, Azerbaijan needs the support of Turkey which is its partner in the Trans- Anatolian Gas Pipeline (TANAP). Turkey, a NATO member and ally of the United States, is likely to agree.

All this underlines the importance of the Southern Gas Corridor running through the South Caucasus between the Azerbaijani sector of the Caspian Sea and Europe.

(News report from Issue No. 171, published on Feb. 12 2014)

Azerbaijan cuts gas exports to Russia

JAN. 16 2014 (The Conway Bulletin) — Azerbaijan cut gas supplies to Russia, potentially inflaming relations between the two neighbours. SOCAR, Azerbaijan’s state-owned energy company, said it had suspended gas flowing along a pipeline to Russia because of construction work. Importantly it didn’t give an expected re-start date.

(News report from Issue No. 168, published on Jan. 22 2014)

TANAP holds tender in Azerbaijan

JAN. 15 2014 (The Conway Bulletin) — The consortium developing the Trans-Anatolian Pipeline (TANAP) invited applications to take part in a tender to build compressor, pressure and metering stations. Azerbaijan’s state energy company SOCAR and Turkey’s Botas and TPAO are developing TANAP which will pump gas from the Caspian Sea to the Turkish-Greek border.

(News report from Issue No. 168, published on Jan. 22 2014)