Politics, religion, and culture where East meets West

Posts Tagged ‘Caspian

Projected TAGP volume suggests a future TCGP

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Anatolian gas pipeline may expand fourfold
Robert M. Cutler; Asia Times Online; Apr. 18, 2012

MONTREAL – The president of the State Oil Company of Azerbaijan (SOCAR), Rovnag Abdullaev, has announced that the US$8 billion-plus Trans-Anatolian Gas Pipeline may be expanded four-fold from its initially planned volume of 8-16 billion cubic meters per year (bcm/y) to as much as 60 bcm/y.

SOCAR will build the pipeline (known by the acronym TAGP and also TANAP from its initials in Turkish) from the Georgian-Turkish border to the Turkish-Bulgarian border, with the participation of the Turkish firms BOTAS and TPAO. The initially estimated cost for its construction was $5 billion, but this has already risen informally to $6-8 billion, and the final cost will be known only after the conclusion of the actual construction contracts.

Abdullaev’s statement represents new formal support for the Trans-Caspian Gas Pipeline (TCGP) project to transport natural gas from Turkmenistan under the Caspian Sea to Azerbaijan and onwards to Europe. The European Union has been participating in talks towards this end jointly with Turkmenistan and Azerbaijan, and has stated its readiness to purchase 30 bcm/y from Turkmenistan.

That is the volume usually cited as necessary to make the TCGP commercially viable. For its part, Turkmenistan has stated its readiness to sell up to 40 bcm/y. According to Abdullaev, however, it is only “after the EU and Turkmenistan agree” that Azerbaijan can “think of which territory can be allocated for transit”.

Read more.


Written by M. James

April 18, 2012 at 9:44 am

Fukushima and the East-West energy corridor

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The failure of the light water reactor in Japan’s Fukushima Prefecture to withstand the March 2011 tsunami will (whether it is a sensible reaction or not) discourage new ventures in nuclear power. The newest big-time player in energy—natural gas—will become even more essential in the West and, as a pipeline for the ever-expanding market, so will Turkey.

According to this report:

In the near term, as world economies begin to recover from the downturn, global demand for natural gas is expected to rebound, with natural gas supplies from a variety of sources keeping markets well supplied and prices relatively low.

Among these sources is “Russia and the other countries of non-OECD Europe and Eurasia” (read: Caspian) with an increase in production of 6 trillion cubic feet from 2007 to 2035. With well-supplied markets and low prices, financing pipelines as an efficient means of transportation will become a critical interest for energy companies with stakes in natural gas. This will be of especial interest to nations such as Azerbaijan and Turkmenistan, which are slated, along with Russia, for further natural gas production. By piping liquefied natural gas to Turkey’s nearest high-capacity Mediterranean port, Ceyhan (as they do with oil), the Caspian nations would be able to reach a large Mediterranean and European market—without relying on Russia or Iran for right-of-way.

Russia, displeased by these prospects, may have even further troubles in the future with its own increased natural gas production. If Russian supply exceeds Eastern European demand, which is believable, a wider market will be desirable. But with the Turkish Straits already jam-packed with Russian oil tankers, there is no room for the liquefied natural gas (LNG) tankers that would be necessary for Russia to export to the Mediterranean (there were 200+ tanker collisions/incidents in the ’90s alone). The solution? Turkey would propose the use of overland routes similar if not identical to those used by other Caspian Sea nations. This may be, for Russia, the only solution (and would be a source of extra pocket change for Turkey). But it will only have to be a “solution” if Turkey doesn’t absorb the remainder of Russia’s export all by itself before it can reach the Mediterranean market—another believable scenario.

Regardless, the Caspian won’t stop producing any time soon, and for Turkey, the West, NATO, and opportunistic supervillain daughters of oil tycoons, a Turkish East-West energy corridor for natural gas is a promising, and lucrative, possibility.

Written by M. James

May 24, 2011 at 2:20 am