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Azerbaijan doubts pipeline for Turkmen gas to be built soon
July 25, 2012 / 5:22 PM / 5 years ago

Azerbaijan doubts pipeline for Turkmen gas to be built soon

* Azerbaijan does no plan to invest in building pipeline

* Minister says project up to Turkmenistan or European firms

By Francesco Guarascio

BAKU, July 25 (Reuters) - Azerbaijan does not plan to invest in building a Transcaspian pipeline to pump gas from Turkmenistan to Europe and does not expect the link to be built soon although it supports the project, the energy minister said.

The European Commission is in negotiations with Turkmenistan and Azerbaijan on the proposed pipeline, part of a planned series of links called the Southern Corridor that is designed to reduce European Union dependence on Russian gas imports.

“I don’t think the Transcaspian pipeline will happen any time soon,” industry and energy minister Natik Aliyev told journalists in the capital Baku.

“Who will construct a Transcaspian pipeline? Azerbaijan is not interested. It has to be Turkmenistan that builds the Transcaspian pipeline, or European companies,” he said.

Azerbaijan expects to increase exports of its own gas.

Turkmenistan, a reclusive former Soviet republic of 5.4 million people, holds the world’s fourth-largest natural gas reserves, according to BP data, and is seeking to diversify supply routes to markets in Europe and Asia.

Moscow has opposed the plans, saying all five Caspian Sea littoral states, including Russia, should approve such a project.

Aliyev reiterated that Baku was ready to supply all the necessary permissions and infrastructure for delivering the gas to Europe.

Azerbaijan and Turkmenistan have long disputed ownership of several Caspian oil and gas fields such as Kyapaz, called Serdar by Turkmenistan, and Chirag, which Ashgabat refers to as Osman.

Aliyev said this would not be a hurdle for the pipeline, which would cross a part of the Caspian Sea belonging to Azerbaijan.

“If we agree with Turkmenistan about the construction of the Transcaspian pipeline, there is no problem with the status of the Caspian Sea,” he said.

“There is no link, no influence between the definition of the status of the Caspian Sea and the potential building of the Transcaspian pipeline. It would be an agreement between two states.”

RISE IN GAS EXPORTS

Aliyev said Azerbaijan expected to increase its gas exports to more than 30 billion cubic metres (bcm) per year by 2030 from the current 6 bcm, with a further increase to 50 bcm possible.

“I think that if our programmes are successful...in 2030, we can produce for export more than 30 bcm of gas per year,” Aliyev said.

Natural gas output in Azerbaijan in the first half of 2012 rose 3.1 percent year-on-year to 13.3 bcm. It sells gas to the domestic market and to Georgia and Turkey via the Baku-Tbilisi-Erzurum pipeline, as well as to Russia.

The biggest gas deposit in the country is Shah Deniz, which is being developed by BP, Statoil and Azeri company SOCAR and is estimated to contain 1.2 trillion cubic metres of gas.

Production was launched in 2006 and the second phase is expected to begin in 2017-18.

“In Shah Deniz II alone we can produce 30 bcm... the 16 bcm, calculated by BP, is very pessimistic. It will be more than this. We can increase easily, but it depends on the market,” Aliyev said.

He said that more gas would come from other fields.

Among major gas discoveries are the offshore Apsheron block with estimated reserves of several trillion cubic feet of gas and associated condensates, Umid, with at least 250 bcm of gas and the Babek deposit, which may contain up to 400 bcm of gas and 80 tonnes of condensate.

“This means we can export up to 30 bcm, and even 50 bcm, if our programmes are successful,” Aliyev said. (Writing by Margarita Antidze in Tbilisi; Editing by Anthony Barker)

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