nCa Analysis
Caspian Connector is certainly an attractive piece of an idea but it is not a complete idea.
First, a few words about Caspian Connector. — Trans Caspian Resources, Inc (TCRI) was established in April 2021. It advocates the construction of a ‘Connector’ to connect a productive offshore field in the Caspian sector of Turkmenistan with the gas transportation network of Azerbaijan. It is presented as a less expensive alternative to the Trans-Caspian Pipeline for the transportation of the Turkmen gas to Europe.
The details about the Caspian Connector can be found at the website of TCRI
https://transcaspianresources.us
John Roberts – Member, Advisory Board for the UN Economic Commission for Europe’s (UNECE) Project on Sustainable Energy, who is also a member of the Advisory Committee of TCRI, gave a presentation on Caspian Connector during the Dubai forum for attracting the investments to the energy sector of Turkmenistan.
In the presentation, he said that there was a window of opportunity of about two months for Turkmenistan to decide on the Caspian Connector. His argument was based on the hypothesis that the next winter could be more severe than the previous and Europe would need to secure its gas supplies in advance, and the Caspian Connector, from the date of its firm commitment, may take about four months to build.
The idea of sending the Turkmen gas to Europe is exciting on its own. However, there are several reasons to argue that the Caspian Connector is an attractive piece of an idea but it is not a complete idea:
- There is no definite roadmap to growth. Arguably, there is a promise but that cannot occupy the place of a roadmap.
- There is no study about the ecological and environmental aspects of the Caspian Connector.
- There is no firm commitment that the space in the Southern Gas Corridor will remain available for the duration of the availability of the gas from the Caspian Connector.
- Since the gas from the Caspian Connector will travel as a blend once it reaches the Azeri system, there is no conversation about the quality coefficient for pricing.
- About the sale-purchase agreement, how many parties will be involved and in what format.
Because of the fact that we are talking of the Turkmen gas, it is logical that we should respect the position and expectations of Turkmenistan. It will not be fair to expect Turkmenistan to accept any proposal unconditionally.
The position of Turkmenistan has already been clarified in the same Dubai forum. The DPM of Turkmenistan for the oil and gas sector, Ashyrguly Begliyev said on 26 April 2023 that the project of transporting Turkmen gas to Europe was still on the agenda of Turkmenistan under the export diversification strategy.
He said that several options for transporting energy resources from Turkmenistan to the EU are under consideration.
“Regarding the European direction, we consider it as a potential consumer space,” said Begliyev.
He said, “We never dismiss [this project] from our range of possibilities, so the issue of transporting Turkmen natural gas to Europe through the Trans-Caspian gas pipeline or through the gas pipeline by land is also on the agenda.”
John Roberts said in his presentation that there was no appetite for huge investments. It means that for now, no option is in sight for a dedicated Trans-Caspian Pipeline, and the Caspian Connector is not a fully-fledged idea though it is an attractive piece of an idea.
In the absence of both, is there any land route to send the Turkmen gas to Europe or at least to Turkiye, which is positioning itself to become a gas hub for Europe?
Sure.
One is the Tabriz-Ankara pipeline of the Iranian AGAT network. In the territory of Iran, it is connected with the pipeline that carries the Turkmen gas into Iran.
The second option will become available on the completion of the Rasht-Astra section, which will connect the Iranian network to the Azeri system and afford the transportation of the Turkmen gas to the Azeri system.
The third option in land route is he Central-Asia-Centre pipeline network for carrying the Turkmen gas to the borders of Europe.
Obviously, the final decision rests with Turkmenistan. /// nCa, 28 April 2023