The pipeline is planned to start from the Turkmenbashi gas field of Turkmenistan and stretch through the Caspian Sea to Azerbaijan and then to Turkey and finally to Europe. The length of the pipeline is more than 200 kilometers and must pass through the sea at a depth of 300 meters. According to the planning, this pipeline would have the capability to deliver 75 billion cubic meters of natural gas annually, and 30 billion cubic meters would be transferred from Turkmenistan through this pipeline per year.
The major part of this pipeline is the sea route from Turkmenistan to Azerbaijan, and land parts in Turkey and Azerbaijan were launched in the past years. Azerbaijan has now completed the Southern Gas Corridor (SGC) and transferred about 954 million cubic meters of gas to the European market between January and April 2022. The Trans-Caspian pipeline will actually be an extension of the SGC to the east. The MoU between Baku and Ashgabat on the joint development of the Dostlug offshore gas field has also created new opportunities for cooperation in the energy sector in the Caspian Sea and increased hopes for the realization of the Trans-Caspian pipeline.
Since its independence from the Soviet Union, Turkmenistan has tried to find new ways to transfer its gas to Europe but has not been successful. However, Ukraine war is helping Ashgabat to realize its dream with Turkey and Europe assistance. The country has no major income sources and is counting on gas exports and implementing this project could bring huge revenues to the country.
Estimates suggest that Turkmenistan’s gas resources are currently 24 trillion cubic meters, and new gas fields have been discovered in recent years, which means its gas reserves will exceed this amount in the future. Therefore, considering annual transfer of 30 billion cubic meters of natural gas to Europe, it can be said that Ashgabat can supply part of Europe’s gas needs for 800 years. 30 billion cubic meters is almost one-sixth of the gas resources that Europe imported from Russia, and in addition to buying gas from Qatar, Algeria and Israeli regime, if the Trans-Caspian goes operational, Europe can fill the gap caused by Russian gas export halt.
Turkmenistan’s annual gas production is 63 billion cubic meters, of which about 30 billion cubic meters are exported to China, partly exported to Russia and Iran, and partly consumed domestically. Turkmenistan’s oil and gas industry development plan projects that this country should increase its gas production to 250 billion cubic meters per year by 2030. Given this policy, if the Trans-Caspian transport infrastructure is prepared, Turkmenistan alone can meet European gas needs.
Obstacles to Trans-Caspian project
Despite supports to Turkmenistan’s project from European countries and Turkey, there are some serious obstacles that could prevent the Europeans from enjoying the benefits of this plan for the next few years. To make operational this project requires planning, engineering, financing, commercial sales contracts, and contracts for platform construction and local infrastructure, as well as the development of the SGC that passes through Turkey. According to the calculations made, more than $20 billion in funding is needed to build this pipeline from the Caspian Sea, which is beyond the financial capability of Turkmenistan and Azerbaijan, and the Europeans should step in, though its construction, if started this year, will not be completed before 2030.
Also, Turkmenistan seeks a long-term contract for return of its investments and worthy revenues, but the Europeans want short-term contracts. This is one of the sticking points that remains unsettled.
On the other hand, if Turkmenistan wants to make huge profits from gas sales, it must increase its production, which is not possible without foreign investment. Foreign investors also have doubts about Turkmenistan’s ability to meet Europe’s needs, because Ashgabat signed agreements for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline two decades ago, and if this project is realized, it would be unclear if Turkmenistan can fulfill all of its commitments.
After Russia, Iran, and Qatar, Turkmenistan is the world’s fourth-largest gas reserves holder, with much of its energy resources remaining unused. Currently, China is the biggest buyer of Turkmenistan’s gas, and Russia also buys part of this country’s gas. China’s policy is also based on hampering the finalization of the Trans-Caspian pipeline, because Beijing plans to monopolize Turkmenistan’s gas for its growing economy and meet all of its needs from this way.
Turkish goals
Under Erdogan, Turkey has pursued ambitious policies in the region and this time, it is focusing on energy lines. Turkey is seeking to transform itself into a global energy hub to both secure cheaper energy and influence the European Union policy by gaining influence on the East-West energy transfer lines.
Turkey is using the opportunity granted by Ukraine crisis to conclude this project as soon as possible for high transit revenues. It is also trying to produce gas from the Mediterranean Sea and through agreements with Israel and to, somehow, take control of the gas transfer corridors to Europe. Raising idea of Trans-Caspian gas field in the current situation by Ankara and Baku also goes back to the political tensions with Iran, and the two countries are trying to bypass Iran’s gas transit routes with this new corridor, as after the crisis in Ukraine, the Caspian route was increasingly used to transport Chinese goods to Azerbaijan and Turkey and from there to Europe.
Erdogan, furthermore, seeks political agenda behind this project. In recent years, Ankara tried to gather around its dominance the Turkic countries in Central Asia to expand its influence. Trans-Caspian gas pipeline can considerably help advance this objective. The strengthening of military cooperation between Turkey and Central Asian countries has increased dramatically after the rejuvenated Karabakh conflict in 2020. Ankara’s actions show that it has seriously decided to take the leading position in Central Asia by embarking on diplomatic ways, as well as trade and energy tools.
A threat to Iran
Having in mind that this gas pipeline is meant to respond to European and Turkish gas needs, it would make a serious rival to the Iranian gas. The Russian and Iranian officials are opposed to the project on environment grounds.
With Iran meeting part of Turkish gas need, in case of launching of Trans-Caspian project, Ankara will no longer need to buy gas from Iran in the long run and can meet its energy needs through this pipeline. However, until the construction and completion of this pipeline and the expansion of infrastructure inside Turkey, Ankara will continue to buy gas from Iran at least for the next few years. Additionally, based on the agreement it recently signed with Turkmenistan and Azerbaijan, Iran is planned to transfer Turkmenistan gas to Azerbaijan, and it would earn from this transit and at the same time supply part of the gas needs of its northern provinces through this pipeline. But Trans-Caspian pipeline will nix this transit route and its benefits for Iran as Turkmenistan’s gas will be exported to Azerbaijan via a sea route.
“If gas from Kazakhstan is also connected to Turkmenistan, a pipeline with a larger diameter will be designed and a larger amount of gas will be delivered to Europe. In that case, there may be no place for Iran’s gas export,” said former Director General of Caspian and Central Asia Affairs of Iran’s Ministry of Oil Mohammad Khaqani, adding: “European companies are investing to take Turkmenistan’s gas to Europe. By building pipelines to export its gas from Turkey to Europe, Russia has helped this country to become central instead of Iran.
Moreover, Russia was ostensibly supporting this project in the past but in reality was against it as Moscow saw it ending its gas export monopoly in Europe. But now that Russia cannot export its gas to Europe, it supports the project as it knows that Turkmenistan cannot alone meet Europe’s needs, and in the future, Moscow can send its gas to Europe bu injecting it in Turkmenistan’s pipeline. In recent months, Russians reached an initial agreement with Turkey for similar supplies to Europe. Experts suggest that due to involvement in Ukraine war, Russia is not in a position to dictate its policies to Turkey and Turkmenistan, and Ankara would conclude its program without Russian disruption.
However, despite Erdogan’s push, the Trans-Caspian pipeline project is far from conclusion in the near future because of the differences among the countries along its way and also its high costs. Initial agreements for it were reached over two decades ago, but it has still made no progress./129