Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Nursultan Nazarbayev, President of Kazakhstan in Astana during an official state visit in July 2018 /AFP
With vast energy sources and favorable geography, Central Asia has been subject to intense rivalries between Russia, China, Iran, Turkey, and the Gulf monarchies, among others, for influence.
The energy sector has become the key prize, with natural gas being of greatest importance. Increasingly, gas is a major source of exports for the region. Central Asia accounts for about 4 percent of global energy deposits. The oil reserves in Central Asia and along the Caspian Sea coast amount to 17 to 33 bbl/d, which are comparable to that of Qatar The Gulf monarchies have been particularly active in this area in recent years, signing several memoranda and partnerships in the region. The energy giant UAE heavily invests in energy sector of the Central Asian countries to increase its own footprint in the region, bring additional investments to fragile economies, and help them to move away from the energy-based economy. Also, the UAE’s growing investments in the region give additional leverage to Dubai-based private companies operating in these countries. Continue reading
The Azerbaijani State Oil Company (SOCAR) announced, on July 27, the formation of a new corporate entity that will oversee the future development of the Ionian-Adriatic Pipeline (IAP) project. The proposed pipeline is designed to deliver Azerbaijani natural gas to Europe—namely to the Balkan region. According to Murad Heydarov, the head of the subsidiary SOCAR Balkan, the announced firm will be set up by the end of this year (AzerNews, Trend, July 27). Although, SOCAR is not a stakeholder in the IAP project, it acts as a technical consultant and manages the future design of the pipeline between the Albanian cities of Fier and Vlora. This project will represent the first time that SOCAR will undertake engineering services in the Western Balkans. Continue reading
Southern Gas Corridor Route
On May 29, Azerbaijan’s President Ilham Aliyev officially inaugurated the first phase of the long-awaited flagship project Southern Gas Corridor (SGC), through which Caspian natural gas from the Shah-Deniz II field will be transported to Europe. The new project consists of several pipeline networks that pass through Georgia and Turkey (via the Trans-Anatolian Pipeline, TANAP) and further through Greece, Albania and Italy (via the Trans-Adriatic Pipeline, TAP). As Shah Deniz Stage 2 is implemented, gas production will increase from 9 to 25 billion cubic meters (bcm) per year.
BACKGROUND: A decade ago, the European Commission issued its Energy and Solidarity Action Plan, which set a clear target to help Eastern European countries boost and diversify their gas imports. The Southern Gas Corridor project is the backbone of this strategy to decrease Europe’s dependency on gas imports from Russia substantially. This has been a growing concern for policymakers ever since a conflict between Gazprom and the Ukrainian government interrupted supplies in the winter of 2006. Continue reading