TRANS-ASIA GAS PIPELINE PROJECT LAUNCHED IN KAZAKHSTAN

The volume reserved for Kazakhstan is intended to supply the southern and south-central parts of the country. To that end, under a separate project, KazTransGaz will lay a 1,510 kilometer pipeline, Beyneu-Akbulak, with a first-phase capacity of 5 billion cubic meters annually by mid-2011 and full capacity of 10 billion cubic meters per year from 2014 onward. Kazakhstan’s government intends to finance 50 percent of construction costs for this line, which will branch off from the Asian Gas Pipeline. A Kazakh government meeting on August 4 approved a proposal to invite Chinese companies to participate in the construction of the branch-off project (Kazakhstan Today, August 4).

Construction work on the main trunk line to China had started already on July 9 in Almaty region, with welding work performed by Kazakh Construction Services and China Petroleum Pipeline Engineering Corporation as contractors for the joint project (Kazakhstan Today, August 4).

Turkmenistan is officially expected to provide 30 billion cubic meters of gas annually for the transcontinental pipeline to China. The other 10 billion are apparently expected from Uzbekistan. These assumptions look risky, however. Under agreements signed with China in April 2006 and July 2007, Turkmenistan is supposed to start the deliveries in January 2009, reaching “up to 30 billion cubic meters” per year for a 30-year period. The 2007 agreement also covers the construction of the Turkmen section of the pipeline to China. Gas fields in eastern Turkmenistan are the main source of supply earmarked for this project.

Estimates of gas reserves in that basin, however, are largely a matter of guesswork for the time being. CNPC is conducting exploration and extraction there under a production-sharing agreement with Turkmenistan. The Samandepe field in the Bagtyarlik contract area, on the right bank of the Amu Darya River, is already in operation. In June of this year, CNPC began construction of a gas-purification plant, with the capacity of five billion cubic meters annually, to prepare the gas for pumping into the export pipeline. Samandepe is the starting point of the Turkmenistan-Uzbekistan-Kazakhstan-China line. On June 27 the first welding work was performed on the pipeline. On August 2 Turkmen media reported that steel pipes were being delivered there for the project. The pipeline will run 188 kilometers on Turkmen territory before crossing into Uzbekistan, on the route to Kazakhstan and China (Turkmen government press service, Altyn-Asir TV, June 27, August 2).

The transcontinental pipeline project hinges on the extent of gas reserves in Turkmenistan’s Amu-Darya basin. China is taking that risk. Western companies and governments practically defaulted on Turkmenistan in 2001, at the very juncture when the contest began with Russia and globally for oil and, particularly, gas reserves. Since then, the West has de facto conceded the gas reserves in western Turkmenistan to Russia and those eastern Turkmenistan to China.

Contrary to some expectations, Kazakhstan is not becoming an exporter of gas to the West. On the contrary, Kazakhstan is becoming itself an importer of Turkmen gas through the Turkmenistan-China pipeline. The operating principle of Western policy seems to be, last come last served with gas in Central Asia.