(MENAFN- AzerNews)
By Orkhan Amashov
The monumental Memorandum of Understanding, signed between Baku
and Brussels on 18 July was primarily about the energy security
provisions that will ensure sufficient investment is made in
Azerbaijan's gas fields and the existing pipeline network so as to
augment the South Caucasus nation's energy export capabilities from
10 to 20 bcm by 2027, with a particular emphasis on complying with
Europe's climate-change objectives.
Baku seems to have been reasonably satisfied, as the MoU signed
constitutes a clearly robust move from long-overdue wishful
thinking to a practical step. But there is also something else that
has not been clearly voiced but remains unmistakably
omnipresent.
Azerbaijan's pivotal role as an energy supplier has also assumed
a heightened significance in view of its capacity as a conduit for
the exportation of Turkmen gas to Europe, courtesy of the fact that
a substantial part of the infrastructure, within the Azerbaijani
segment, is in place. The main issue is, however, that Turkmen gas
could be transported across the Caspian.
Europe at present
As the doomsday scenario of a chilly winter without Russian gas
continues to prey heavily on the minds of those responsible for the
EU's energy policy, a wide array of options, some previously
disparaged, are being contemplated with unflinching urgency.
The idea of integrating the vast gas fields of Turkmenistan,
across the Caspian and through Azerbaijan and Türkiye with European
energy architecture has traditionally been viewed as a largely
esoteric scheme bedevilled with a litany of practical
constraints.
The difficulties have not gone away, but the urge to exploit the
possibilities offered by this has assumed heightened significance
in light of the EU's exacerbating predicament. If previous schemes
pertaining to Turkmen gas were linked with the costly and
improbable Trans-Caspian Gas Pipeline (TCGP) project, now much
humbler and more practical options seem to be in the offing.
As Europe is cracking under the strain of its bold ambition to
extricate itself from dependency on the Kremlin-dominated web of
energy supply routes, economic consequences continue to cause
massive concerns.
As of 13 June, one euro is worth one dollar for the first time
in two decades, and there is an exponential fear that the economic
sanctions imposed on Russia will, amongst other factors, induce a
full-blown recession at home.
Charles-Henry Monchau of the Swiss private bank Banque Syz, in
an interview to Bloomberg, stated that the present state of affairs
entrapping Europe can be described as a“vicious cycle”, as higher
energy prices drive the euro lower, and, in turn, the weaker euro
renders energy imports more expensive.
Europe is urgently seeking new gas supplies with the knowledge
that no alternative source or alternative sources cumulatively will
or can be a replacement for Russian energy, in the short term.
Previous endeavours
Although it cannot be ascertained with any degree of certainty
if the whole scheme has been agreed with the EU, Ankara has
seriously proposed the idea of the delivery of Turkmen gas westward
for the first time in two decades.
On 2 June, Turkish Vice President Fuad Oktay, speaking in the
Turkish embassy in Ashgabat, stated that three separate options,
namely delivery via 'a pipeline', 'a swap deal', and 'a pipeline
combined with shipment' were being studied and the principal
acquiescence of the Turkmen president was secured.
The plan of connecting the gas-rich Central Asian nation's
resources with European markets has a history, which is full of
fruitless debates and futile hopes. The idea has historically been
viewed as deeply theoretical and largely impracticable.
The rationale militating against such a development included
Ashgabat's perceived recalcitrance, a plethora of geopolitical
constraints, linked with the diplomatic pressure exercised by
Russia and, to a certain extent, by Iran, together with an absence
of infrastructure, collectively making the whole endeavour
impossible and a flimsy opportunity for investment.
The prospects for the westward delivery of Turkmen gas were
first given due consideration in 1999, when Ankara expressed its
explicit backing for a project proposed by a consortium of Shell,
Betchell, and GE for the construction of a major pipeline across
the Caspian Sea, otherwise known as the Trans-Caspian Gas Pipeline
(TCGP) to enable the transport of the Central Asia's rich resources
to Azerbaijan and Turkiye, with Europe envisaged as a potential
final destination.
In view of Azerbaijan's newly discovered Shah Deniz field, the
idea was shelved. Other than that, the project was objected to by
Russia and Iran on two grounds, namely on the basis that all the
Caspian littoral states were to agree to a seabed pipeline,
together with alleged environmental concerns, which appeared more
contrived than genuine.
Three-pronged scheme
The concept of the aforementioned TCGP remains highly unlikely
due to the massive cost it would incur. In this vein, it could be
surmised that the pipeline element ingrained in Fuat Oktay's
proposal was not related to the mega-project in question.
David O'Bryan, writing for Eurasianet, is of the opinion that it
is probable that reference was being made to the Trans-Caspian
Interconnector (TCI), proposed last year by the Florida-based Trans
Caspian Resources (TCR).
The plan includes a relatively short 48-mile pipeline across the
Caspian Sea which will carry currently flared gas, emitted as a
result of oil drilling, from Turkmenistan's Magtymguly oil field to
Azerbaijan's BP-operated Azeri-Chirag Guneshli oil and gas field,
from where it will move westward via existing pipelines.
According to TCR's own provisional estimate, the proposed
pipeline could carry between 10-12 bcm per annum, starting with
associated gas.
The second element is more or less straightforward and refers to
an existing trilateral swap deal agreed by Turkmenistan, Iran, and
Azerbaijan in November 2021. At present, Ashgabat sends to Tehran
1.5-2 bcm annually, which the latter transports to its northern
neighbour. Some energy analysts suggest the overall volume could be
doubled.
The Turkish vice-president's third suggestion of 'ships and a
pipeline' is somewhat opaque. It could perhaps be surmised that the
shipment part of this design would probably entail the shipment of
“compressed natural gas”, the option hailed for its low cost and
practiced worldwide as a successful model.
In all guises and implementation modes, the three-pronged
proposition involves the Southern Gas Corridor (SGC), which is an
indispensable artery in the westward transport of Turkmen gas
obviating Russia. Presently, the Trans-Anatolian Pipeline (TANAP)
offers around 15 bcm a year of spare capacity.
The export potential of the westernmost section of the SGC, the
Trans-Adriatic Pipeline (TAP), which currently carries around 10
bcm per annum, is projected to be doubled; according to some
estimates, it could even be tripled at some point in the
future.
It should also be borne in mind, as a first stage, that the
vital link enabling the transport of Turkmen gas to Azerbaijan is
yet to be worked out, as, without completion of that critical
phase, any asseveration as to European prospects of Turkmen gas
will be nothing but an example of hoary thinking. The present
climate and the measurably improved relations between Baku and
Ashgabat give rise to the hope that some of the difficulties
previously deemed intractable can be surmounted in the very near
future.
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