Another trans-Caspian pipe
dream By Robert M Cutler
Recent weeks have seen increasing United
States activity in favor of constructing the
Trans-Caspian Gas Pipeline (TCGP) from
Turkmenistan to Azerbaijan. But what are the
chances of anything really happening?
From
the technical standpoint, there is no obstacle. An
undersea ridge spanning the Caspian from the
Azerbaijan's Apsheron peninsula to the port of
Turkmenbashi, dividing the Caspian into deeper
southern and shallower northern halves, is the only
feasible route for such a
trans-Caspian pipeline.
This was
determined in the 1990s, when PSG, a joint venture
between Bechtel and the GE Capital unit of General
Electric (later joined by Royal Dutch Shell),
first sketched out the project that would see gas
ultimately reaching world markets via a
Georgian-Turkish gas route.
Now, as then,
technical specifications can minimize the risk of
ecological damage from pipeline construction and
operation. The only complicating factor is some
minor seismic activity, and design features of the
pipeline can easily take them into account. (The
1990s project foresaw the pipe diameter varying
from 28 to 52 inches.)
Such objections
were raised by Brussels Eurocrats in the late
1990s, but the real origin of their opposition was
a wish to exclude US influence from the region.
Now that Russia has turned out not to be the
friend that they expected, the Europeans are
hungry for Turkmenistani gas to feed the Nabucco
pipeline that has been on the drawing boards for
some years.
No agreement will be possible,
however, until Ashgabat and Baku resolve their
disagreement over the oilfield that that former
called Serdar and the latter calls Kyapaz.
Establishing a joint economic zone can resolve the
problem. This is a standard procedure of the
"modified median line" principle for demarcating
maritime rights to subsoil resources; Kazakhstan
and Russia have used it to common advantage in the
north Caspian. However, it can be implemented even
without a bilateral agreement over subsoil rights.
In other words, Azerbaijan and
Turkmenistan do not have to agree on every detail
of their Caspian offshore sectors if they wish
just to declare Kyapaz/Serdar to be such a joint
economic zone; resolving the Kyapaz/Serdar issue
is the sine qua non for international
energy companies and consortia to begin to treat
the TCGP as a project that has the true potential
to spring from the drawing-boards into reality.
Indeed, it could even be the "sweetener" that
clinches the deal.
Just this past summer,
Azerbaijani Deputy Foreign Minister Natik Aliev
suggested that it was a real possibility,
following a meeting between President Ilham Aliev
of Azerbaijan and President Gurbanguly
Berdymukhamedov of Turkmenistan. This is one
important fact underlying the insistence of
Russia's President Vladimir Putin to hold the
five-sided summit of Caspian littoral states in
Teheran this month.
He wishes to use the
resulting declaration to require all five states
to approve any pipeline construction even if it
does not run through their Caspian sectors. It is
unlikely, however, that Azerbaijan will accept
this interpretation, and as Turkmenistan shows
increasing willingness to explore non-Russian
routes for gas export to world markets.
The case has been made in the past that
the commercially most attractive route for such a
pipeline is through Iran to Turkey. Such a
pipeline could still, in principle, fill the
planned Nabucco line stretching from Turkey to
Central Europe (or, for that matter, the "South
Stream" or "Blue Stream Two" pipeline for which
Russia has been heavily lobbying). However,
American pressure is not the main factor that
prevents such a pipeline from being constructed.
The experience of Turkey in its bilateral
gas trade with Iran suggests that Iran has
difficulty respecting agreements that it has made
regarding prices and quantities (as well as the
quality of the product). These terms have been
unilaterally and repeatedly altered by Iran in the
case of Turkey, and that is why their pipeline
connection has seldom operated at full capacity.
Agreed terms simply become the basis for further
bargaining.
India's experience in
attempting to negotiate a three-way
Iran-Pakistan-India pipeline deal is analogous.
For example, Iran insisted on receiving payment at
liquefied natural gas rates for gas regularly
delivered through a regular overland pipe. The
repetition of such experiences strongly suggests
that, despite attempts to decentralize oil and gas
decision-making since the late 1990s, Iran has
still not succeeded in raising economic
rationality and technical competence above
factional infighting and political cronyism.
Indeed, the political and economic
ascendance of the Iranian Revolutionary Guards
Corps, closely linked to President Mahmud
Ahmadinejad, as an energy-industrial complex in
the past few years only indicates that this
problem has worsened. These experiences, together
with the fact that Iran's constitution expressly
denies the jurisdiction of international
tribunals, including arbitration tribunals, in any
instance whatsoever, leave both Iran and its real
and potential economic partners with no recourse
other than domestic Iranian courts.
Moreover, even despite recent experiences
in gas transit through Ukraine and Belarus, it is
far from clear to Brussels that it would be an
improvement for Tehran rather than Moscow to
control the spigots to the gas pipes. The struggle
for a "Third Way" in Europe has come to mean
something very different from a mixed-economy
alternative to the Hobson's choice between
unfettered capitalism and state socialism.
Robert M Cutler is senior
research fellow of the Institute of European,
Russian and Eurasian Studies, Carleton University,
Canada.
(Copyright 2007 Asia Times
Online Ltd. All rights reserved. Please contact us
about sales, syndication and republishing.)
All material on this
website is copyright and may not be republished in any form without written
permission.
0„8 Copyright 1999 - 2007 Asia Times
Online (Holdings), Ltd.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
