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 Günther 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

Turkmenistan pushes for Trans-Caspian Pipeline despite border uncertainty

Turkmen president Gurbanguly Berdimuhamedov

Turkmenistan has made another step to promote a pipeline across the bed of the Caspian Sea, this time at an environmental conference in the capital Ashgabat on 28th February.

The event, entitled "Environmental Aspects of Trans-Caspian Pipelines" was attended by 300 representatives from twenty countries. Concrete information, as usual in the reclusive state, is hard to come by but representatives of Chevron, Statoil, Dragon Oil, and OMV were all apparently present.

Official Turkmen websites said that the conference focused on President Gurbanguly Berdimuhamedov's desire to raise interest in the Trans-Caspian Pipeline (TCP), which would carry gas from Central Asia to Azerbaijan. One website stated that the event would assist in the “search for specific ways and solutions to this critical issue [ i.e. building a TCP] that will let us approach the common goal to turn the Caspian region into a region of peace and wellbeing.”

Russia and Iran staunchly oppose the construction of a TCP. Ostensibly their concerns are legal and environmental: that the status of the Caspian has not yet been settled between all five littoral states (particularly regarding whether the Caspian is a sea or a lake), and that – absent such a legal framework – any subsea hydrocarbon projects must be agreed upon by all five littorals. This is disingenuous, ignoring the extensive oil and gas extraction which all five states currently undertake near their coastlines and which is certainly capable of creating a Caspian-wide ecological disaster.

The real reason is political and commercial: neither Moscow nor Tehran want additional pipelines to emerge which could transport Central Asian energy to world markets without crossing Russian or Iranian territory. This position was reiterated by Russian President Dmitry Medvedev at a Caspian heads-of-state summit in Baku during November. However on that occasion President Berdimuhamedov offered a defiant note, insisting that only the two participating states – Turkmenistan and Azerbaijan – had to agree on a project. Azerbaijan has repeatedly agreed to the idea in principle, and reiterated that position at the environmental conference.

Caspian Sea map

Having apparently addressed the legal challenges in Baku, the Turkmen leader has now sought to address the environmental challenges in Ashgabat. The vague statements that emerged from the conference emphasise the need for the highest environmental standards to be adhered to in any subsea engineering project, and that – thanks to the experience of international companies represented at the forum – these standards could certainly be applied in the Caspian. Interestingly, no Russian or Iranian companies were publicly stated as having attended the conference.

This implies that Turkmenistan is more serious about committing to a TCP than often assumed. Disputes with Azerbaijan over ownership of certain fields, Russo-Iranian opposition and China's efforts to secure Turkmen gas, not to mention Turkmenistan's opaque decision-making, were all seen as major obstacles. President Berdimuhamedov's increasingly proactive and independent foreign policy seems to be changing all that.

Sources: Turmenistan.ru, News.az, Trend.az

For more information, see the Menas Borders website, here.