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Washington encourages multiple pipelines from Central Asia
By Jerome Bernard
AFP
WASHINGTON
Petroleumworld.com 08 13 06
Pursuing geostrategic goals, the US government is encouraging construction of multiple oil and gas pipelines in Central Asia as a pipeline leak in Alaska partly shut down production in that US state, driving up world oil prices.
"In the Caspian, we thought we had a legitimate role to play from a strategic perspective," said Matthew Bryza, deputy assistant secretary of state for European and Eurasian Affairs, speaking Wednesday before the United States Energy Association. "Part of what we are trying to do is to ensure security of the global supply.
"Our goal has been to try to increase the efficiency of markets, especially (the) gas market, because we believe US national interests are best served when the markets function efficiently," he added.
Washington got actively involved in building the Baku-Tbilisi-Ceyhan pipeline that was formally launched in July.
The 1,770-kilometer-long (1,100-mile-) pipeline that delivers oil from Azerbaijan to the Turkish terminal of Ceyhan was built outside the territory of Russia, which up to now has controlled practically all energy exports from Central Asia to Europe.
Under an accord signed in June by the government of Kazakhstan, the future of giant energy deposits in that country will be resolved the same way.
The Caspian Sea has vast energy reserves, which are being shared by five countries: Russia, Kazakhstan, Azerbaijan, Iran and Turkmenistan.
"Sometimes we are accused to somehow try to fight a new great game to push Russia out of the Caspian region," said the State Department official. "Our desire (is) to avoid monopoly power, monopoly tendencies. Our goal is not to be anti-Russian, or to isolate Russia."
Many gas pipeline projects are also being developed. The pipeline between Baku, Tbilisi and Erzurum will follow the Baku-Tbilisi-Ceyhan itinerary and will link Azerbaijan's Shah Deniz gas field to Turkey next year.
The European Union is also working on a project that provides for building a 3,300-kilometer-long (2,050-mile-) gas pipeline linking Iranian gas fields in the Caspian basin to Austria.
Another proposed gas pipeline will link Iran to India via Pakistan.
A dispute over gas that broke out between Russian and Ukraine last January has heightened interest in natural gas, noted Julia Nanay, director of consulting firm Petroleum Finance Company (PFC).
"Countries in Central Asia began to see that they can charge more for gas," she explained.
According to the State Department's Bryza, "natural gas right now is the most strategically urgent energy issue we face in Eurasia today."
"If you look at how the European gas market is functioning, I argue it is not functioning efficiently when gas is purchased largely in Central Asia for relatively low prices compared to what it is sold for in Europe," he pointed out.
"What we would like to do is to increase market options, use market forces to begin to eliminate that disparity in prices between Central Asia gas purchases and European gas sales," Bryza continued.
"We would like to work with companies and countries to examine options to move some of that gas from Central Asia to the south and to the east," he added.
Frank Verrastro, director and senior fellow with the energy program at the Center for Strategic and International Studies, said the global energy market will change over the next five or six years.
In his view, "that puts increasingly pressure on the delivery system."
PFC's Nanay said that Kazakhstan would become "the critical country" of the future as its oil production grows from 1.2 million barrels a day in 2005 to 3.5 million in 2015.
China, whose energy needs are enormous, is playing an increasingly important role. This year, China plans to open an oil pipeline linking Kazakhstan with China's western region of Xinjiang.
AFP 13 0517 GMT 08 06
Copyright ©2006 AFP. All Rights Reserved.
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