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03.03.2008

ON THE REGIONAL ENERGY DEVELOPMENTS

   

Sevak Sarukhanyan

energy (medium) In the beginning of 2008 in the region progressed energy developments of not little importance the most significant of which is sure to be the crisis among Iran and Turkmenistan, which, in its turn, will have a serious influence on Iran-Turkey, Iran-Azerbaijan relations.

On October 2007 the institute of strategic planning and economic development, founded by the president of Turkmenistan K. Berdimuhamedov in 2007, appeared with its first report which, as a matter of fact, was the beginning of possible changes in Turkmenistan’s energy policy. According to the report, to ensure the further steady development of the country it is necessary not only to promote steady flow of foreign investments and liberate the country’s economic life, but also purposefully raise the price of Turkmen gas for all the customers. The main objective of raising the price does not only promise increase in state income but also creation of common energy strategy with the EU based on the principle of implementing open market mechanisms.

In 2007 Turkmenistan raised the price of gas sold to Russia and China, and Beijing agreed to pay $195 for 1000 cubic meters, basing on the agreement signed on January 21, 2008, $50 of which Ashgabat is to direct to the financing of the construction of Turkmenistan-China gas pipeline. At the same time, the unexpected decision of Turkmenistan to stop exporting gas to Iran from January 1 was a real surprise for the experts and the Iranian party. The surprise was that the Turkmen authorities stopped supplying Iran with gas without beginning any negotiations over the gas price. Reasoning the suspension of gas supply by mere technical problems, only a week later the Turkmen government informed Teheran that it would not resume gas export unless Iran agreed to pay $150 for 1000 cubic meters instead of the present $75. Such a policy may be characterized as an ultimatum, as the suspension of gas supply was made in winter, comparatively cold even for Iran, especially if we take into account that the northern parts of Iran use only Turkmen gas and the Islamic Republic has no technical means to transport the southern natural gas to the north.

In this context, the estimation “immoral” given by the speaker of Iran’s foreign ministry to such a step of Turkmenistan is quite justified. At the same time, this step of Turkmenistan may be estimated not only by the categories of morality but also by the ones of international right. The deputy president of Iran’s state gas company I. Gambarin has announced that besides making its relations with Ashgabat more precise, Teheran is going to turn to the International Court to bring a suit against Turkmenistan to compensate loses caused by its illegal step.

However, it is obvious that Iran and Turkmenistan energy cooperation faces the prospective of being stopped once and forever. Below we’ll make an attempt to represent the main standpoints of Turkmenistan’s changing policy.

Absence of resources: under the conditions of strengthening energy cooperation with Russia and cooperation with China Turkmenistan faces the problem of not enough gas resources. That’s the very reason bringing to the crisis in its relations with Iran deprived of gas supply for quite a long time. This approach may only partially explain the present situation as in the beginning of the year Turkmenistan didn’t have shortage of gas and the extent of gas supplied to Russia haven’t been increased.

Turkmenistan plays in favor of Russia: Iran seriously damaged Iran-Turkish energy cooperation by stopping the gas export to Iran as Teheran had to stop exporting gas to Turkey to satisfy its own needs. As a result, Russia increased gas supply to Turkey through “blue stream” gas pipeline and in Ankara and Brussels was concluded that Iran and Turkmenistan may not be considered to be trusty partners of the gas pipeline project of “Nabucco.” It was a serious strike for Iran as still in December 2007 the foreign minister M. Mottaki announced that Iran intended to take part in the project and had signed the agreement on the principles of Iran-EU energy cooperation still in 2004. It is sure to be of interest to Russia which was able to suggest Turkmenistan a long-term profitable package-program of cooperation.

Turkmenistan plays in favor of the EU. According to the last announcement of the Turkmen authorities, the Turkmenistan-EU agreement on energy cooperation is being prepared for ratification. Taking into consideration the fact that the Turkmen gas gets to the EU through two routs – Iran and Russia – Ashgabat has made a decision to stop Iran’s mediation in the cooperation with Iran and use only the Russian rout or spur the construction of Trabzon gas pipeline which will provide a chance to use the potential of Baku-Erzurum gas pipeline from the standpoint of exporting gas to Turkey and the EU. Against this version have mainly come to witness still unsettled Turkmen-Azerbaijan energy rows and imperfectness of RF-EU energy cooperation. From the other hand, the main victim of Turkmen-Iranian gas argument has become Turkey, as Iran had to stop exporting gas to this country basing on the necessity to satisfy its own needs. Let’s mention that both Iran and Turkmenistan were condemned by Turkey’s government, and in this sense, it is not that grounded to interpret Ashgabat’s policy by its aspiration to join Baku-Erzurum gas pipeline.

However, at present the Iranian-Turkmen relation are at the stage of the deepest crisis and it may result Iran establishing more active relation with Azerbaijan.

To provide the northern part of the country with gas Iran is going to develop its own energy-transportation infrastructure in the coming years. However, it is also possible that Tehran will adhere to energy cooperation with Baku. The first avoidance of this possibility is the announcement made by “Azerigas” CJSC executive director A. Melikov, according to which the Azerbaijani State Oil Company is going sign an agreement of exporting oil to Iran. According to the data presented at the beginning of the year, in 2008 Azerbaijan gas production will increase by 55% and the restored Azerbaijan-Iran gas pipeline will make it possible to export up till 3 billion cubic meters of gas to Iran. It makes 1/3 of consumption in the south of Iran, which may be considered quite a little extent.

M. Mottaki announced in January that it is not excluded that for exporting gas from Azerbaijan to Turkey will be used the territory of Iran, taking into consideration that the city Tabriz, considered to be the biggest gas junction, is quite close to the Azerbaijani border.

It is obvious that that Azerbaijan’s decision concerning to carrying out energy transportation projects mainly depends on Baku’s relations with the West. However, possible improvement in Iran-West relations, deepening of political instability in Georgia and future developments in Iran-Turkey relations may change the course of Baku’s policy implemented in this direction. At the same time, Iran has an important leverage to develop future energy dialogue with Azerbaijan: this country is the main provider of gas as well as electricity to Nakhijevan. In this sense, Azerbaijan’s interest to have closer energy relations with Iran has objective reasons.


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