Baku, Azerbaijan, April 4
By Aygun Badalova -Trend:
While the European Union continues showing interest in Trans-Caspian gas pipeline project as the additional source of its energy supplies diversification, some reports have recently appeared about one more challenge that this project has faced.
The challenge is related to recent German RWE's transaction. Late in March German utility sent its upstream arm RWE-Dea to the LetterOne Group, owned by Russian investors including Mikhail Fridman. It should be noted that RWE Dea is one of Germany's major oil and gas exploration and production companies with international activities. It conducts exploration activities in Algeria, Libya and Turkmenistan. In particular, the company has been working at the Block 23 in the Turkmen section of the Caspian Sea since 2009. Several promising hydrocarbon structures in Caspian Sea's Turkmen sector were discovered, according to RWE Dea's earlier statements.
RWE's transaction has caused many talks about the further prospects of Trans-Caspian pipeline project's implementation, through which Turkmen gas can go to the European markets.
The transaction has dealt a serious blow to European hopes for a Trans-Caspian gas pipeline to tap the central Asian republic's abundant reserves, Energy Intelligence Group said in its article.
The Group mentioned that RWE had been a big supporter of both a Trans-Caspian gas pipeline and had lobbied Ashkhabad hard for a gas block in Turkmenistan to underpin its efforts. But while a Trans-Caspian pipeline had also enjoyed strong support from the European Union as a way of diversifying away from Russian gas, it was strongly opposed by Moscow, which has no interest in seeing Turkmen gas compete in the key European market. And with RWE-Dea now in Russian hands, the prospects for progress on a Trans-Caspian pipeline have diminished sharply, the article said.
"The acquisition of RWE Dea by a group of Russian investors certainly does not improve the prospects for a Trans-Caspian gas pipeline, or for exports of gas from Turkmenistan to Europe, Julian Lee, Senior energy analyst at the Centre for Global Energy Studies (UK) told Trend.
Overall Lee considers supplies through the Trans-Caspian gas pipeline as a competition to Azerbaijani gas export to Europe, and considering that, the prospects of the first ones are not high, particularly "as Azerbaijan will be trying to sell more of its own gas in Europe in the coming years."
The reaction of the Turkmen authorities to the purchase /of RWE Dea/ is not yet known, as no senior executives of Dea have visited the country since the deal, Lee stressed.
At the same time the EU once again expressed the interest in continuing the negotiations on the Trans-Caspian gas pipeline. "The negotiations between Azerbaijan, Turkmenistan and the European Commission, as well as their continuation are extremely important issues," the head of the EU Delegation to Azerbaijan, Malena Mard said, adding that the EU intends to continue the active work on this project.
The Trans-Caspian gas pipeline project, which envisages the laying of around 300 kilometers long gas pipeline under the Caspian to the shores of Azerbaijan is regarded as the optimal option for delivering Turkmen resources to European markets.
The project indeed presents an excellent option for the EU to diversify its energy supplies and it can be implemented as a part of major Southern Gas Corridor.
However, much work should be done and many challenges, including political ones, should be addressed on the way of its implementation. And the opposition to this project from Russia and Iran still remains one of such challenges.
But the game is worth the candle. And the EU as the most interested party in this game should step up its efforts now to gain further the prize.
