After the Soviet Union’s breakup, the newly independent states in Central Asia found themselves determining the main directions of their geopolitical gravitation.
Their problem was that, having huge natural reserves, they were dependent on Russia in terms of transportation, which limited their access to global markets.
However, it was obvious for analysts that the region that holds 4.3% of the world’s proven gas reserves would sooner or later become the epicentre of geopolitical confrontation between Russia, the United States, the European Union, China, India, Pakistan, Turkey, Iran and even Azerbaijan.
Initially, the political instability typical for most Central Asian states aggravated by bordering on the dangerously explosive Afghanistan hindered the Western expansion to the region. So Russia, which had historically secured a foothold here, was able to promote and carry out projects aimed at building an energy union in Central Asia that would help the members to boost their energy exports and export revenues.
On the other hand, it was obvious that the region’s energy-rich countries would definitely study alternative ways to transport their resources as soon as their domestic political situations changed.
Back in 2002, five gas transport companies from Turkey, Bulgaria, Hungary, Romania and Austria voiced an idea to build a gas pipeline that would run from the Caspian Sea and the Middle East across Turkey to a distribution centre in Europe.
In response, Moscow in 2003 reached an agreement with Turkmenistan under which the latter agreed to supply its natural gas to Russia for the next 25 years. This was a preventivemeasure, as in 2004 representatives of the “European Great Five” presented their project, Nabucco, in Vienna, which immediately gained support from the EU and the US. Moreover, they also presented another project, which envisaged the construction of a Trans-Caspian gas pipeline as an addition to Nabucco.
In response, the presidents of Russia, Kazakhstan and Turkmenistan signed an agreement in May 2007 under which they undertook to build a Caspian gas pipeline with an annual throughput capacity of up to 40bn cum (1.4tn cu f) by 2014, which should have put theWest’s efforts to rest. This, however, did not stop the United States or Europe. Given the multivector foreign policy proclaimed by Ashgabat, the West chose it as its main target to actively promote the project of a Trans- Caspian pipeline laid across the Caspian Sea.
Ashgabat was creative in handling the situation: at first it scared the West away by demanding huge investments and the signing of long-term gas purchase contracts with high prices. This policy did yield immediate results. However, judging by the recent visit of a Hungarian delegation to Turkmenistan, Europe has gone into the offensive, announcing its general agreement to Ashgabat’s terms. Moreover, Hungarian political expert Istvan Fortai says the EU is willing to subsidise prices in order to reduce its dependence on Russian gas. Simultaneously, America drafted a programme of cooperation with Turkmenistan, which, according to Matthew Bryza, US Deputy Assistant Secretary for European and Eurasian Affairs, could become an “absolutely new chapter” in its relations with Ashgabat. In other words, Turkmenistan has found itself under political and financial pressure from the West. This is why Russian President Dmitry Medvedev’s four-day tour of the CIS, including Azerbaijan, Turkmenistan and Kazakhstan, taken at the beginning of July, was of strategic importance.
Let us start with Baku. Azerbaijan justifies its participation in Western oil and gas projects by the fact that it has excessive gas resources, but no direct access to the global market. Gazprom’s CEO Alexei Miller, who accompanied Medvedev on the trip, said the gas giant was willing to buy as much gas as possible and pay the market price. It should be remembered that Baku currently sells gas to Turkey at just $120 per 1,000 cu m. Moscow offered twice as much. Besides, the Nabucco pipeline, the project which Azerbaijan has joined, will not be completed until 2011, while gas sales to Gazprom can start in 2009.
Baku, however, turned the proposal down, saying it was ready to consider the “Russian project” only alongside other export routes. In this case, President Ilkham Aliyev was walking a fine line: having pro-mised Russia to “consider new projects”, he did not give a specific answer.
The only reason was the huge pressure on Baku coming from both the United States and Europe.
Ashgabat acted differently. First of all, it confirmed its commitments to supply gas to Russia until 2025. Secondly, the parties reached an agreement to set up ferry routes on the Caspian Sea, from a Turkmen port to Makhachkala or Astrakhan. So Ashgabat’s confirmation that it was interested in building and using the Caspian pipeline, as well as its commitments to supply gas to Russia, can be interpreted as Turkmenistan’s intention to stick to gas export routes going via Russia. Incindentally, the US is not always successful in imposing its will: Switzerland, for example, is carrying out a number of projects in Iran, ignoring America’s threats of sanctions or other moves, but staying within what the current international reality permits.
And more to the point, as is known, one of the main obstacles to the Trans-Caspian project is the undetermined legal status of the sea. Ahead of the forthcoming summit of the region’s states, the balance of forces was 4 to 1. This means that the common position of Russia, Azerbaijan, Kazakhstan and Turkmenistan was opposed only by Iran. Now things are changing.
Turkmenistan has remained true to its earlier announced position about cooperation with Russia in an alliance with its Central Asian partners.
Until recently, Iran also claimed an unchanged foreign policy, even on such a pivotal issue as the Caspian Sea demarcation.
This means that Azerbaijan may find itself isolated in the Caspian region. This is why the so-called Caspian equation is far from being solved, which means that the Trans-Caspian project will remain frozen for a while. This, however, does not mean that regional players will give up a broad energy dialogue, because a different course of events may bring extremely negative consequences for all of them.
