EU Hopes to Dump Russian Gas for Supplies from Turkmenistan

One problem: Turkmenistan is on the other side of the Caspian Sea. Financial, logistical and political problems to getting the infrastructure in place abound

During the Ukrainian crisis, Brussels and Washington have intensified their efforts to reduce Europe’s dependence on Russian gas.

The first step was to stop Russia’s South Stream project once and for all. Although South Stream enjoyed a lot of support in Europe, Brussels did its best to impede the project, and Washington eventually sent U.S. Senator John McCain to Bulgaria to deliver the final blow.

Russia responded by announcing that it will shift all its gas transit from Ukraine to Turkey, and the EU is now suffering the consequences of its “diplomatic victory.”   

In dire need of alternative sources of gas supplies, Brussels decided to exped itelongstanding plans to import gas from Azerbaijan and Turkmenistan.

Turkey just hosted the groundbreaking ceremony of the Trans-Anatolian Natural Gas Pipeline (TANAP), which will link the existing South Caucasus Pipeline with the planned Trans Adriatic Pipeline (TAP) to bring natural gas from Azerbaijan to Europe. That won’t happen before 2020, and it is only a drop in the bucket because TAP’s initial capacity will be about ten billion cubic meters per year, with the option to expand the capacity up to 20 bcm/year.

By way of comparison, the maximum capacity of Russia’s South Stream pipeline would have been 63 bcm/year, and the same is true of the new “Turkish Stream” project.

But given the fact that Azerbaijan’s Shah Deniz 2 field will produce only 16 bcm/year, the EU cannot even use the maximum capacity of TAP and TANAP unless another gas supplier is found. This is where Turkmenistan comes in.

Last year, Turkmenistan and Turkey signed a framework agreement to supply gas to TANAP. Denis Daniilidis, EU Charge d’Affaires in Turkmenistan, told Reuters recently that the EU wants to revive the Trans-Caspian gas pipeline to this end. According to Daniilidis, EU Energy Commissioner Maros Sefcovic is going to visit the Central Asian country in coming months to restart talks about the project.

There are several reasons why that is a bad idea.   

First of all, it doesn’t make much sense to deliver Turkmen gas across the Caspian Sea to Turkey, as long as TAP is the only pipeline which can bring the gas to customers in the EU. Even if the capacity of TAP is expanded, the pipeline can only accommodate a small amount of Turkmen gas. Nabucco is dead, and it is very likely that similar projects will also fail to get off the ground because nobody is willing to put up the money.

Speaking of which, it is unclear who is supposed to pay for the construction of the Trans-Caspian pipeline. Azerbaijan has indicated that the EU and Turkmenistan have to pick up the bill. Of course, neither is prepared to do so.

Turkmenistan desperately wants to diversify its gas exports, but as the folks from Stratfor have pointed out, the country faces “unprecedented economic and security challenges” in 2015, which affect its “willingness to participate in Western-oriented projects such as the Trans-Caspian natural gas pipeline.”

However, the biggest obstacle to the implementation of the project has always been, and will continue to be, Russian opposition.

Both Russia and Iran oppose the construction of any pipeline across the Caspian Sea due to its unresolved legal status. The EU would be well advised not to do something stupid before the five littoral states agree on the Caspian Sea’s status and maritime borders.

Moscow has warned Brussels repeatedly against meddling in the affairs of the Caspian Sea littoral states, stressing that the Trans-Caspian pipeline affects Russia’s legitimate interests.

Russian Foundation for Energy Security Director Kostantin Simonov was not exaggerating when he said, “the construction of this pipeline would mean to spit in the face of Russia and the real risk may be that of a military conflict, in front of which Russia will not pull back.” 

Now it is up to Brussels to decide whether or not the Trans-Caspian pipe dream is worth the risk.

By Christoph Germann

Russia-insider.com, March 30, 2015