Turkmenistan has won
support from its Caspian neighbours to lay a pipeline under the sea and become a
major gas supplier to Europe, a senior official said on Friday, boosting plans
for the EU-backed Nabucco project.
Turkmenistan, which
according to BP data holds the world's fourth-largest natural gas reserves, will
have up to 40 billion cubic metres of gas spare to supply to Europe, said
Baymyrad Hojamuhamedov, deputy chairman of Turkmenistan's cabinet of ministers.
He did not specify when this gas would be available.
"Taking into account
domestic demand in the west of the country and supplies from there to Iran, we
will have 40 billion cubic metres (bcm) of gas free every year, so European
countries need not worry," Hojamuhamedov told an energy
conference.
Turkmenistan, Central
Asia's largest natural gas producer, is seeking to diversify exports from its
traditional market, Russia, and has already boosted supplies to China and
Iran.
It could potentially
become a major supplier of gas to the European Union-backed Nabucco project to
supply the fuel to European markets. Nabucco, intended to deliver gas from the
Caspian region to Europe, is expected to cost about 7.9 billion euros ($11.04
billion) and is seen coming on line with about 15 bcm of gas by the end of
2014.
"Europe is the
world's biggest spender on energy imports. Turkmenistan is ideally placed to
catch a piece of the action," said Wolfgang Peters, head of supplies for
Caspian, Central Asia and Russia for RWE Supply & Trading
GmbH.
"We offer a major,
attractive and growing energy market with more than half a billion consumers,"
said Norbert Jousten, ambassador and head of the delegation of the European
Union to Kazakhstan.
NEW
MARKETS
Hojamuhamedov said
Turkmenistan's president, Kurbanguly Berdymukhamedov, had proposed to a regional
summit in Baku on Thursday that any two of the five countries on the Caspian
should be able to agree on laying a pipeline under the sea.
He said "the
majority" of the Caspian countries had agreed to this proposal. Hojamuhamedov
declined to say which of the Caspian countries had agreed to the bilateral
pipeline proposal.
In theory,
Turkmenistan can build a pipeline to Azerbaijan, a route that could deliver gas
onward to Europe via Turkey.
But the minister did
not specify whether or not there had been a formal agreement, and he did not say
whether Azerbaijan -- also a potential supplier of gas to Nabucco -- intended to
participate in such a project.
"Today, we are
selling gas to Iran, China and Russia and talks on the
Turkmenistan-Afghanistan-Pakistan-India pipeline are moving at a fast pace," the
minister said.
"This initiative now
opens up one more direction -- across the Caspian Sea -- and the opportunity to
sell our hydrocarbons on the European market."
The Caspian is the
world's largest fresh-water lake, therefore its regulation does not fall under
the 1982 U.N. Convention on the Law of the Sea that regulates maritime
boundaries and exclusive economic zones.
"The question about building a
pipeline under the sea is very difficult because it is not just economics
involved. There is also ecological safety," said Alexander Medikov, a maritime
lawyer for Jurinflot.
"The decision to build a
pipeline should be agreed upon by all parts, or else it could end quite badly.
Iran, whose Caspian sector borders on the Azeri and Turkmen waters in the south,
would suffer greatly from an accident there."
ING bank's energy
analyst Igor Kurinnyy said: "Turkmenistan is sending a message to the EU that it
can supply gas for their pipeline without full agreement from all Caspian
countries."
"But in reality it will be
very difficult to bypass Russian and Iranian agreement," he said."Russia and
Iran are major gas players and want to undermine the investment case for the
Nabucco pipeline and block Turkmenistan from selling gas to
it."
Russia, which also
has a coastline on the Caspian, is pursuing its own rival project, South Stream,
to supply gas to the European market. Turkmenistan plans to treble gas output to
230 bcm annually by 2030, of which 180 bcm will be exported, Bairamgeldy
Nedirov, minister of oil, gas and mineral resources, said on
Thursday.
It traditionally
produces around 70 bcm annually, although supplies are estimated to have fallen
to 40 bcm after a dispute with Russia over a ruptured pipeline last
year.