Monday, 2 May 2011
PIPELINE POLITICS - CENTRAL ASIA
Central Asian Oil and Gas Pipelines:
Today, Central Asian Oil is transported along two routes: north through Dagestan and Chechnya to Novorossisk, and a second route west to the Georgian port of Supsa. Transport fees have ensured the safety of the pipelines in war-torn Chechnya.
The existing pipelines are only capable of getting a small fraction of the area's oil and gas wealth to market. Central Asian republics are anxious to sell more oil. Americans, Europeans, and Russians are anxious to buy more, especially from countries that do not belong to OPEC. Investors from Saudi Arabia and the United Arab Emirates are also anxious to begin transporting more oil out of Central Asia. Only secure pipelines are lacking. The most promising routes have been identified:
1. Russia favors a northern route. Kazakhstan would expand its existing pipelines to link them with the Russian network of pipelines. Azerbaijan would build a pipeline from Baku to Novorossisk. Critics worry about the pipeline's path through Chechnya and charge that if the project was successful, Russia would enjoy too great a control over Central Asian oil.
2. Azerbaijan, Turkey, Georgia, and the United States favor a western route. According to one variation, oil and gas would flow to the Georgian port of Supsa. From there, it would be shipped through the Black Sea and the Bosporus to Europe. and then ship it through the Black Sea and the Bosporus to Europe. Turkey has expressed worries about tanker traffic in the Bosporus, and worries about the damage an accident there might do to Istanbul. According to the Turkish variation on the western route, a pipeline should run from Baku to the port of Ceyhan on the Turkish Mediterranean coast. At over US$3 billion, the cost of constructing such a pipeline may turn out to be too expensive.
3. The most direct, and cheapest, route is to south, across Iran to the Persian Gulf. Iran already has an extensive pipeline system, and the Gulf is a good exit to Asian markets. U.S. sanctions on Iran block this option.
4. Despite the staggering costs it would take to construct, China is willing to construct an oil pipeline across Kazakhstan to China.
5. The American oil company Unocal has proposed the construction of oil and gas pipelines from Turkmenistan through Afghanistan to Pakistan and later to India. Afghanistan's long war has prevented this project from moving forward. If some degree of stability returns to Afghanistan, the project may be resurrected.