Publication: Monitor Volume: 5 Issue: 19

Turkmenistan’s Competent Authority for Oil and Gas disclosed yesterday the conclusions of an eagerly awaited feasibility study of a trans-Caspian pipeline for the export of Turkmen gas. The United States company Enron, a world leader in pipeline construction and management, conducted the study under a U.S. government grant.

The pipeline would run on the bottom of the Caspian Sea from the vicinity of Turkmenbashi to Baku, to continue overland via Azerbaijan and Georgia to Turkey, with a total length of some 2,000 kilometers. The throughput capacity, initially 10 billion cubic meters annually, would grow to 30 billion in a follow-up stage. The anticipated cost is approximately US$2 billion.

The Amoco and Shell companies, as well as Enron, are believed to be candidates for the consortium to build and manage the pipeline. Kazakhstan is expected to contribute some export volumes (International agencies, January 27). Turkey committed itself last year to purchasing 15 billion cubic meters of Turkmen gas annually and to transiting another 15 billion to Mediterranean and Western countries. In addition, Presidents Saparmurat Niazov of Turkmen and Suleyman Demirel of Turkey and signed a political agreement last October to carry out the project. Under U.S. advice, Niazov has renounced a competing project which would have routed the pipeline overland through Iran.

The trans-Caspian project is deemed crucial to ensuring the profitability of the planned oil and gas export corridor, of which the planned Baku-Tbilisi-Ceyhan oil pipeline is the twin component. Turkmenistan, for its part, is desperate to export its gas. Almost two years ago Russia blocked Turkmen gas transit through Russian pipelines, causing a catastrophic fall in Turkmenistan’s output and starving the country of revenue. Even before that output fall, Turkmenistan had tapped only a fraction of its vast gas reserves.

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