Unambiguous Choice By Turkmenistan Needed To Push Trans-Caspian Gas Pipeline Project Forward - Ex-Adviser To President

Krnjević reminded that Azerbaijani President Ilham Aliyev made it clear that Azerbaijan would still be willing to participate in any Trans-Caspian Gas pipeline project involving Turkmenistan but would not be willing to initiate it or to invest in it.

"Now, you know that in various forms, such proposals involving Turkmenistan have been floating around for decades. None have come close to taking off, because at the end of the day what is required is a clear, unambiguous choice by the leadership of Turkmenistan to pursue it and a similar rock-solid commitment by the Westerners to support it,” he said.

As Krnjević explained, this has three interrelated aspects: financing, market demand, and duration of contracts. He noted that the moment has passed when Europeans would be willing to make the sort of commitments that would be needed for Ashgabat to move forward on a large-scale, strategic project - even now, in the context of the West's decision to divest itself from Russian gas.

He pointed out that this is not simply due to the EU's policy choice to stay away from new hydrocarbon projects.

“Even if this policy could somehow be reversed, what the Turkmen would look for in addition, are serious security guarantees - unambiguous security guarantees that would involve not just the Europeans but the Americans, too. This is the fourth interrelated aspect, and I think that this is simply not in the cards," he said.

Krnjević pointed out that Turkmenistan considers the project too great of a risk.

"It would not be sufficient to allay Turkmen fears of Russian and Iranian negative reactions. Again, even assuming that the financing and demand and contracts could be ensured," he said.

President of Azerbaijan Ilham Aliyev said during the opening ceremony of the Shusha Global Media Forum on“New Media in the Era of the 4th Industrial Revolution” on July 21 that the Trans-Caspian Pipeline is not the project, which Azerbaijan will initiate.

"Because usually the projects, which are initiated by the countries, other projects based on these country's resources as we did for instance with the Southern Gas Corridor," said President Ilham Aliyev.

The head of state noted that this project as an idea is based on the gas resources of Turkmenistan.

"Therefore, it's not up to us to initiate it or to invest in it. What can we do? We can provide our existing infrastructure or can provide infrastructure some land in their possession in order to build a new infrastructure. But I think, it's also important to know that today, Azerbaijan is working on expansion of the pipeline, which was built less than three years ago. Why? Because demand in Europe is growing. The pipeline, which was designed for 10 bcm like TAP, now, needs to be expanded up to 20 bcm. TANAP from 16 to 32. That was not expected by us. Because situation has changed. So, why we talk about expansion is that Azerbaijan will produce more gas and is producing every year more gas than year before. For instance, if 2021 we exported 19 bcm, last year, it was more than 22 bcm, and this year, probably it will be 24 bcm or even more. And these months - that's in the time when we didn't see each other - we already announced the discovery from the Absheron gas field, which possesses at least 300 billion cubic meters. And the first well is already producing gas more than any well on Shahdeniz. So, in other words, expansion of our pipeline system is based on our growing resources. For additional gas from Eastern shores of the Caspian – first, the Trans-Caspian Gas Pipeline must be built under the sea, and second from Baku to the European destination, another something like the Southern Gas Corridor must be built. And the main question is who will finance these important projects? And we don't have an answer. Therefore, before we find an answer who will finance it, I think, implementation or even some ideas about that will be unrealistic. And also you know very well that now European banks stopped financing the projects of fossil fuel. Therefore, it will be difficult to raise substantial money for that. Because, when we were building the Southern Gas Corridor, apart from corporate financing, we had financing from EBRD, EIB, ADB and also from the Asian Infrastructure Investment Bank. But now two of these European institutions - they are out, I hope temporarily, from the fossil fuel financing, therefore, who will finance it? The green transition makes implementation of this project even more complicated. And the fluctuation of the gas prices in Europe, which we see also creates a lot of questions. By the way, also the price cap, which, I think, was absolutely unacceptable for the consumers to put a limit for the price. This is totally in contradiction with any market economy principles, which these countries were advocating for many years. So, in other words, from realistic point of view, this is very problematic. But again, if someone decides to build the Trans-Caspian Pipeline, we will be only happy. We will have more transit fees and more cooperation," President Ilham Aliyev said.

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