Since the project was first proposed in the United States in 1996, the construction of the Trans-Caspian Pipeline (TCP) has remained unresolved. TCP aims to transport the abundant natural gas resources of Central Asia to the European energy market through the Southern Gas Corridor (SGC). It is the most economically viable way to connect the energy-rich countries of Central Asia with the European energy market.
The importance of TCP lies in how it changes the energy landscape of Central Asia: it bypasses Russia and Iran for natural gas exports. However, prior to this, TCP faced two major obstacles: disputes over the Caspian Sea borders among the five coastal states, and the positions of Iran and Russia, which stated that any project in the Caspian Sea must be agreed upon by all Caspian coastal states.
However, the most significant and dynamic changes have occurred in the Caspian Sea and South Caucasus regions over the past four years. On August 21, 2018, after twenty years of negotiations, the five Caspian coastal states - Azerbaijan, Kazakhstan, Turkmenistan, Russia, and Iran - finally signed the Caspian Legal Status Convention. Following this, Azerbaijan and Turkmenistan opened a new chapter in their bilateral relations and signed a Memorandum of Understanding (MoU) on joint exploration and development of the disputed offshore oil field in January 2021. Azerbaijan previously called the field Kepez, while Turkmenistan previously called it Serdar. The two countries eventually agreed to rename the field "Dostluk," meaning "friendship" in both Turkmen and Azerbaijani.
The key obstacles to the construction of TCP have now been overcome. The Caspian Convention stipulates that the states participating in the project can build the underwater pipeline themselves without the prior approval of other states. However, Moscow and Tehran still officially believe that any underwater pipeline must be agreed upon by all Caspian coastal states. In this regard, they referred to the Framework Convention on the Protection of the Caspian Sea Environment (the Tehran Convention), signed in November 2003.
The Memorandum of Understanding signed between Azerbaijan and Turkmenistan on the joint development of the offshore "Dostluk" oil field has opened new opportunities for Caspian energy cooperation and brought hope for the realization of TCP (Agreement). Azerbaijan has completed the SGC (Southern Gas Corridor) project, and from January to April 2021, a total of 954 million cubic meters of Azerbaijani natural gas was supplied to the European energy market. Italy purchased the largest share of Azerbaijani natural gas, approximately 734 million cubic meters, with an additional 128 million cubic meters and 92 billion cubic meters of natural gas supplied to Greece and Bulgaria respectively. The TCP pipeline will be an eastward extension of the SGC pipeline and will enhance the latter's transmission capacity in the future.
The energy agreement between Turkmenistan and Azerbaijan will lay the foundation for transporting Turkmenistan's energy through Azerbaijan's existing energy infrastructure. Exporting natural gas and crude oil from this offshore field to the west is economically feasible, so the promotion of TCP not only benefits Turkmenistan but also the EU. The pipeline will diversify Turkmenistan's natural gas supply needs and allow European energy consumers to access the rich energy resources of Central Asia.
Natural gas exports play a crucial role in the socio-economic development of Turkmenistan. The state plan for developing its oil and gas industry aims to increase annual natural gas production to 250 billion cubic meters, with more than 70% used for export. Currently, Turkmenistan has few opportunities for diversifying its export routes. Turkmenistan's natural gas is mainly exported to China via the Central Asia-China pipeline. In January 2021, Turkmenistan exported 2.786 billion cubic meters of natural gas to China, accounting for nearly 60% of the pipeline's gas supply. In 2020, the Central Asia-China pipeline delivered over 39 billion cubic meters of natural gas to China.
Before the main gas pipeline between Turkmenistan and Russia exploded in 2009, Russia was the main buyer of Turkmenistan's natural gas. After that, Gazprom resumed small-scale purchases, but completely stopped purchasing in 2016. Until 2019, Gazprom signed a five-year contract to import natural gas from Turkmenistan, but the annual volume was only 5.5 billion cubic meters. A decline in natural gas sales hit Turkmenistan's export revenue. Delays in the construction of the Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI) were another issue for the country. Therefore, the lack of diversified export routes indeed posed a serious challenge to Turkmenistan's natural gas exports.
Recent global increases in natural gas prices have highlighted the importance of this issue. The completion of the Southern Gas Corridor from Azerbaijan to Italy will encourage Turkmenistan and Europe to further advance TCP. Transporting natural gas to the west through Azerbaijan's existing energy infrastructure will bring economic benefits, as it can reduce Ashgabat's heavy reliance on a few export routes.
The "Dostluk" energy agreement between Azerbaijan and Turkmenistan has opened a new era of Caspian energy cooperation. This cooperation can lay the foundation for TCP and strengthen regional energy security. The development of the European gas industry has made the diversification of gas supply sources and routes a key factor. The EU and the US should take this opportunity to increase support for Turkmenistan's participation in the South Caucasus Gas Project (SGC). The US has already enacted legislation authorizing the State Department to take practical actions to support the implementation of the project.
After the Second Karabakh War, Azerbaijan changed the regional geopolitical landscape. Now, opening traffic connections and strengthening regional economic integration are crucial for peace and development. The TCP project has tremendous potential to promote peace, security, economic cooperation, and development in the South Caucasus region. At the same time, it can meet the EU's energy needs in the most economical way without violating the principles of the European Green Deal. Additionally, the TCP project will enable Armenia to purchase natural gas from Turkmenistan; or, if the TCP project is built through the existing Azerbaijan-Georgia-Turkey line, Armenia can obtain natural gas supplies through the Georgian pipeline system.
Source: The National Interest
Original: https://www.toutiao.com/article/7529730057322742272/
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