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Europe risks losing Turkmen gas
03.05.15 04:27 Economics
Europe risks losing Turkmen gas
Photo: Europe risks losing Turkmen gas / Economy news

Baku, Azerbaijan, May 2

By Elena Kosolapova – Trend:

Supplies of Turkmen gas to Europe are being discussed not for the first year, but it seems that the time, when the parties will move from words to deeds, has finally come.

This week, the European Commission delegation visited Ashgabat at the highest level. Practically the only issue, which was being discussed during the talks, was the energy supplies from Turkmenistan. The energy ministers of Azerbaijan and Turkey, through the territory of which Turkmen gas should go to Europe by transit, also participated in the talks.

Following the negotiations, the sides signed a quadripartite declaration on cooperation in the energy field. In this declaration, they stand for “the creation of favorable conditions necessary to ensure a reliable, stable and long-term international energy cooperation, which equally takes into account the interests of producers, transit countries and consumers of energy.”

Besides, “the importance of equal and mutually beneficial cooperation in ensuring the supplies of natural gas from Turkmenistan to Europe” was stressed.

From the formulations, the purpose of this declaration becomes absolutely obvious. The matter is not just the energy cooperation, but the direct supplies of Turkmen gas to Europe. In order to realize these plans, the EU, Turkmenistan, Azerbaijan and Turkey agreed to establish a working group.

Following the talks, Vice-President of the European Commission on energy issues Maros Sefcovic tweeted that Turkmenistan reaffirmed its commitment to the Southern Gas Corridor, which provides for supplies from the Caspian region to Europe, and that the meeting in Ashgabat is an impetus to continue the cooperation.

It is quite understandable why Europe started to make a fuss over Turkmen gas now. The EU has long ago said about its interest in Turkmen gas. However, the need for it has never been so acute. Today, Europe is almost entirely dependent on gas supplies from Russia. This situation never suited the EU.

However, in light of recent geopolitical events, when gas supplies by Gazprom began to be used for political pressure, this dependence has become quite painful. Europe got tired of the fact that at every opportunity Russia tries to scare it by “shutting off the gas.” Europe got tired of the fact that it often has to pay not the real value of gas, but as much as the supplier wants. Europe got tired that gas supplies are increasingly becoming not the economy, but politics. So right now there is every reason to believe that the EU will finally take real and drastic steps to get rid of its gas dependence on Russia.

The first step in this direction has already been made. The EU has agreed on gas supplies from Azerbaijan. Also, the contracts to build TANAP (Trans-Anatolian gas pipeline) and TAP (Trans Adriatic Pipeline), which will deliver the gas to Europe, have been signed. In accordance with the agreements, Europe will receive Azerbaijani gas by 2020. Thus, the EU will finally have a source of gas supplies alternative to Russia.

This is a huge step forward on the way of Europes energy security, and the officials of the European countries and the European Commission have repeatedly told about it. However, the volume of gas supplies, that Azerbaijan is ready to offer the European Union, is not so great in comparison with the needs of Europe. 10 billion cubic meters, which are planned to be delivered at the first phase, will be only enough for South and part of South-Eastern Europe. At the same time, the rest of the EU countries will continue to depend on the Russian gas.

Therefore, it is obvious that the EU is looking for additional sources of supplies. The most realistic source is Turkmenistan. TANAP and TAP gas pipelines, which will be ready by 2020, can receive gas from the Turkmen fields in addition to the Azerbaijani gas. Azerbaijan and Turkey are ready to provide their territory for transit. Turkmenistan has sufficient gas reserves and is interested in diversifying its exports and entering the European market.

The only problem to be solved before the Turkmen gas comes to Europe is the construction of the Trans-Caspian pipeline across the bottom of the Caspian Sea, which will connect Turkmenistan with Azerbaijan. Turkmenistan and Azerbaijan have repeatedly expressed an interest in it and gave their consent for the construction.

Thus, everything is up to the EU. European countries need to decide whether they need a gas pipeline which would bring gas, and as a result, political independence to them. Such decision must be made as soon as possible.

There are a lot of countries wishing for Turkmen gas. In China, where the major share of Turkmen gas goes, consumption is growing constantly. China is ready to absorb all the Turkmen gas, according to many experts. And if Europe doesn’t hurry, Turkmenistan and China can increase the contract volumes of gas supplies. As a result, when Europe comes to its senses, Turkmenistan may not simply have available volumes.

In addition, the Turkmen gas can go in the other direction as well - to the south by TAPI pipeline (Turkmenistan-Afghanistan-Pakistan-India). Negotiations on the construction of this pipeline have recently intensified. It is supported and promoted at the highest level in the countries involved in this project. A consortium for implementation of this project has been created and the parties express their intention to begin construction of the pipeline in 2015. The market of the region, where the Turkmen gas can go through this pipeline, is huge.

Therefore, if it is implemented, Europe will likely have to say goodbye to dreams of Turkmen gas, at least in the long term. It is possible that the development of additional fields will allow Turkmenistan to fill a few pipes with its gas. But this will require investments in exploration, development, research, construction of internal infrastructure, etc. Moreover, it will require time for all this work, the time that the EU doesn’t have.

Therefore, the EU needs to finally decide whether it really needs Turkmen gas, as it has been repeatedly said, or it is just all words. No time is left for hesitation

 

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