CA-NEWS (TM) - In case Turkmenistan does not support Nabucco project, EU will not invest into energy industry development of Central Asia.

Is Ashgabat to supply gas to Europe?

Yury Sigov, from Washington, specially for CA-News

European Union made it clear that fate of Nabucco project depends on Turkmenistan. In particular, it depends on the state's president Kurbanguly Berdimuhammedov. No one from Europe has not been able so far to reach understanding with Turkmen President, but negotiations will be carried out in the upcoming months.

Fund for EU energy projects amounts to EUR 2.3 billion. EUR 200 million is allocated for Nabucco project. However, if Brussels does not achieve approval of gas supplies to Europe from Turkmenistan, neither  Ashgabat nor other Central Asian states will see the money.

EU has 43 energy projects, which it intends to finance in order to achieve energy independence by means of reducing supplies from Russia and getting them from other markets – primarily from Central Asia.

Leadership of Central Asia understands and even supports this desire of Europeans to consume gas and oil of the region. However, whereas question of oil supply seems to be settled, question of gas supply remains open.

EU states and Caspian Sea states are virtually “trading gas” for several years. Turkmenistan and Azerbaijan accuse Brussels of “carelessness” regarding the project because money has not yet been invested, as it was promised. EU leadership, in turn, blames President of Turkmenistan for the delay, as he has not yet confirmed readiness to participate in Nabucco.

At the same time, both sides are trying to gain extra billions of cubic meters of gas and money as well as put forward regional interests. Turkmenistan does not intend to count only on Europe. In any case, it will develop gas supply to China, Iran, and Russia.

Europe needs a contract on gas supply minimum for 30 years. Only this way Brussels will be required to collect nearly EUR 8 billion necessary for Nabucco. Theoretically, but not in practice, Europe and the United States understand the essence of Central Asian politics, which aims to receive benefits from everyone (whether it is investments, modern technology or diplomatic support).

Special envoys of US State Department and EU, ministers of leading European states frequently visited Ashgabat this month attempting to gain Berdymuhamedov’s support regarding Nabucco (preferably in a written form on an official blank with seal) so that investment can be started.  

Yet senior Americans and Europeans did not achieve any clarity on the Nabucco project, moreover, made situation even more complex. Berdymuhamedov seems to support the project by words. But it is unclear whose territory will be used to lay pipelines and who will provide monetary and political guarantees.

Pipelines will not be laid under Caspian Sea: it has not yet been divided, Iran will not allow any such activity, and Turkmen-Azerbaijani relations do not create favorable environment for cooperation.

Turkmenistan's proposal to supply gas to Europe bypassing Azerbaijan – through Iran, Armenia, Turkey and Mediterranean ports – also looks fantastic. The United States will not tolerate bypass pipes just as Europeans.  Besides, US military attack on Iran in respect to its nuclear program has not yet been removed from agenda.

There is option to supply Turkmen gas to Europe through Russia (as Ashgabat sells all its gas exports at the border). However, the EU is struggling to get energy independence from Russia and its gas policy.

Europe has also no agreement with Turkey yet, through territory of which pipelines are supposed to go to Europe. Turks have lain down disadvantageous for EU conditions of gas transit. In addition, Ankara views any relationship with Brussels in terms of discussing Turkey’s membership in the EU, and economic and pipeline problems are not as important for it.

As a result, the EU made it clear that in case Turkmenistan does not provide any guarantee regarding gas supplies by early summer in the person of the President, Nabucco funds will be used for other projects and regions (North Africa, Iraq, etc.).

In this case not only Turkmenistan looses, but the whole CA region because investments in energy industry development is the only sector of economy of Central Asia that the West is willing to finance. Therefore, fate of Nabucco project and development of energy sector in Central Asia depends on Ashgabat.