Tuesday, 20 September 2011

Iran, Russia oppose cross-border Caspian pipeline

Iran and Russia have both announced their opposition to a pipeline across the Caspian Sea, which was backed by the EU last week as a means to bring Caspian gas to Europe.

A trans-Caspian pipeline, running west from Turkmenistan to Azerbaijan along the Caspian seabed, has been under discussion for years, but has never got off the ground due to a lack of commercial imperative and political will. An ongoing dispute between Azerbaijan and Turkmenistan over their maritime border, and associated gas and oil fields, has also stymied progress.

On 13th September, however, the EU's Energy Commissioner G√ľnther Oettinger announced that the EU was would start negotiating a legally binding treaty between Azerbaijan and Turkmenistan to build a trans-Caspian pipeline. Europe, said Oettinger, “is now speaking with one voice” – previous efforts to coordinate the 'Southern Corridor' to bring Caspian gas to Europe have been hamstrung by competing European agendas and approaches. The new mandate will empower it to arrange the legal and commercial requirements of a trans-Caspian system.

The pipeline would enable Turkmen gas to reach Europe without crossing Russian or Iranian soil. The EU is keen to reduce its energy dependence on Russia and avoid politically problematic Iran, whilst Turkmenistan is looking to diversify its energy export routes.

Tehran and Moscow have reacted angrily to the EU's intervention. Iran has stated that it opposes the project on ecological and legal grounds. Russia expressed its regret, and warned that the project did not account for “the actually existing international legal and geopolitical situation in the Caspian Basin today”.

The reference to geopolitics is significant, as it indicates the main reason for Russian and Iranian opposition (notwithstanding ecological protestations) – that a Caspian pipeline would enable Central Asian gas to avoid their territory, reducing their political and commercial leverage.

The other objection is that the legal status of the Caspian Sea, including the littoral states' maritime boundaries, is still unclear. Although most of the states have simply got on with developing gas and oil fields in their presumed sectors, the exact boundaries and the right of states to undertake major projects – like a subsea pipeline – is still legally unclear.

It is likely that Russia and Iran will apply a range of legal and political pressures to stop the pipeline from going ahead. The EU's internal problems and lack of focus towards the Caspian region may make it an unreliable patron for Azerbaijan and Turkmenistan, and unable to push the pipeline through against Russian and Iranian opposition.

Sources: Russian Ministry of Foreign Affairs, Reuters

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