Energy in Central Asia

One of the lasting effects of 9/11 was to bring the importance of Central Asia to the fore. The great powers of the world, such as the US, Russia, India, and China, are vying for military bases there, and especially for the region's natural resources such as oil and gas. Iran is obviously part of the mix there as well.

In this post I mentioned the visit to Washington by Azerbaijan's President Aliyev, and in this post I mentioned Vice President Cheney's visit to Kazakhstan. What do the two have in common?

One answer is the Baku-Tbilisi-Ceyhan pipeline. This pipeline brings oil from Azerbaijan's oil fields in the Caspian Sea starting in Baku, to Tbilisi, Georgia, and ending in Ceyhan, Turkey, on the Mediterranean.

Plans have been in the works for some time to bring oil from Kazakhstan to Baku, so it can be piped through the BTC pipeline as well. The oil from Kazakhstan would originate around the Kashagan offshore field, and a pipeline under the Caspian Sea is envisioned, running from Aktau to Baku. To begin with, oil would be brought to Baku by tanker.

All of this was part of Cheney's visit to Kazakhstan, where he apparently conveyed US support for the project.

Moscow presses for better Caspian oil deal Following Azerbaijani President Ilham Aliyev's late April visit to Washington and U.S. Vice President Richard Cheney's early May visit to Kazakhstan, a breakthrough seems imminent on the project to connect Kazakhstan with the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. Officials in Kazakhstan now anticipate that Presidents Nursultan Nazarbayev and Aliyev will sign a framework agreement on that project by late June.

Kazakhstan's Prime Minister Daniyal Akhmetov and KazMunayGaz Managing Director for Transport and Infrastructure Karygeldi Kabyldin have just discussed this issue in Baku with Aliyev and Azerbaijan's State Oil Company management. According to officials on both sides, no political or commercial differences arise between them regarding this project. Remaining technical issues, such as the mode and schedules of transportation, can be ironed out in time for the agreement's signing.
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Following his Baku visit, Akhmetov expressed confident hope that the agreement to be signed by the two presidents would include a pipeline on the Caspian seabed from Aktau in Kazakhstan to Baku. Thus far, Russia's opposition (in tandem with Iran) has intimidated Astana into withholding its signature on the pipeline project. Cheney's visit to Kazakhstan seems to have encouraged Astana that it is Kazakhstan's national interests to join the project.

As mentioned, Russia and Iran are opposed to this Kazakhstan project, in part because it would lessen dependence on their oil. And, with an outlet in Turkey, Western nations could have access to oil that doesn't come from the Middle East. The BTC pipeline will never replace the Middle East, because the volumes are far too low, but it does provide an alternate supply.

If Kazakh oil was added to this pipeline, it would only increase the importance of this pipeline.

As part of the Great Game at work here, US access to this oil means continued good relations with Turkey. And that means walking a fine line between Turkey's and Azerbaijan's disputes with Armenia, Turkey's relationship with the Kurds, etc...

Governments take a lot of grief, and rightly so for a lot of things they do, but they also have great responsibility in navigating these large issues where much is at stake.

(Trivia: The pipeline in the James Bond movie The World Is Not Enough was a fictionalized version of the BTC pipeline.)