12.04.2021-18.04.2021 No 302

LATEST DEVELOPMENTS IN TURKSTREAM NATURAL GAS PIPELINE

Turkey is an important country that between Gazprom and Botas is ex- Pipeline (TANAP) from Shah Deniz-2 functions as a bridge in the transporta- pected to be of key importance for EU on June 30th 2018 also played an im- tion of energy resources between pro- countries, as well as for Turkey and portant role. Approximately 1.25 bil- ducer and consumer countries. The Russia, in terms of ensuring energy lion m3 of gas was transported through TurkStream natural gas pipeline pro- supply security. the TANAP pipeline from June 30th th ject, which targets the European mar- Turkey’s natural gas imports recorded a 2018 to February 28 2019. This num- ket, strengthens the position of Turkey decrease of 8-10% on average from ber reached 3.7 billion m3 by the end of by transferring the Russian gas via the 2017 to 2019. According to the reports 2019 and at the end of 2020 the figure Black Sea to Turkey and then to Eu- of the Energy Market Regulatory Au- reached 8.4 billion m3. Within the rope. The pipeline starting from Rus- thority (EMRA), in 2019, natural gas framework of the TANAP and South- sia’s Anapa, by moving 930 kilometers imports were made mostly from Russia ern Gas Corridor project, the European with a rate of 33.61%. Also in 2018, Union and Turkey are trying to reduce under the Black Sea, from the Thrace Russia has become Turkey’s largest their natural gas dependence from Rus- coast, reaches Turkey. The project, by natural gas imports partner with sia. Turkey’s focus on Iran and Azer- connecting natural gas reserves in Rus- 46.95%. When we compare this num- baijan as an alternative to Russian nat- sia to Turkey’s natural gas distribution ber with previous years, the share ratio, ural gas is disturbing Moscow and network directly, aims to create a relia- which was 55.31% in 2015, has been therefore raising its expectations from ble energy supply for Turkey, South decreasing over the years to 52.94% in the TurkStream natural gas pipeline. and Southeast Europe. The sea part of 2016 and 51.93% in 2017. In fact, the On January 27th 2020, the TurkStream the line consists of two lines running reason for this reduction was the debate carried out the first 1 billion m3 natural parallel to each other from the Black on gas prices that began in 2015 be- gas supply, 54% of which was deliv- Sea. Each of the pipelines has a capac- tween Russia and Turkey. Botas’s re- ered to the Turkish natural gas market ity of 15.75 billion m3 in total 31.5 bil- quest for a 10.25% discount from Gaz- and 46% to the Turkish-Bulgarian bor- lion m3 where the first line goes to Tur- prom has affected the amount of natural der. Gazprom is currently supplying key and the second line would transport gas supplied to Turkey at a certain time. natural gas to Serbia and Bosnia-Herze- natural gas towards Europe. The total However, according to media reports in govina through TurkStreams’s operat- cost of the project has been stated as 7 2018, Gazprom agreed to payback Tur- ing line and with the completion of the billion dollars. key more than 1 billion dollars for gas pipeline in Hungary in the last quarter For the realization of the project, on supplied to Turkey in 2015 and 2016. of 2021, the second line is expected to December 1st, 2014, Russia’s Gazprom According to Gazprom’s May 2019 re- be operational. The fact that Turkey has and Turkey’s Botas Petroleum Pipeline port, despite Turkey’s decline in natural temporarily stopped the flow of natural Corporation have signed a mutual gas imports from Russia, Turkey is the gas for the maintenance of the pipelines memorandum of understanding about world’s third-largest Russian natural on its own shows the importance of the TurkStream project. However, the gas consumer, after Germany and Italy. Turkey in this project. technical, economic and legal frame- Turkey’s top three natural gas imports As a result, the TurkStream project work of the project was determined by are Russia with 15.196 million m3, strengthens Turkey’s central position in the intergovernmental agreement Azerbaijan with 9.585 million m3 and the region’s energy markets and main- signed between the Government of the Iran with 7.736 million m3 respec- tains the advantage of being an influen- Republic of Turkey and the Govern- tively. Turkey, which is heavily de- tial country in international energy pol- ment of the Russian Federation within pendent on energy, is successfully con- icies as a bridge between Russia and the scope of the 23rd World Energy tinuing to reduce Russia’s share of this Europe. For Russia, the rapid launch of Congress held in Istanbul on October dependence by turning to alternative the TurkStream project is important in 10th, 2016. The project that would pro- pipelines. In this regard, Azerbaijan’s terms of leaving Ukraine out of the pro- vide a total of 31.5 billion m3 of natural launch of natural gas delivery to Turkey ject by providing natural gas supplies to gas flow with the memorandum signed via the Trans Anatolian Natural Gas Turkey and Europe.

Written by Dinara Taldybayeva, Eurasian Research Institute, Kazakhstan

Politics, Foreign Affairs, and Security Economy, Finance, and Energy Society and Culture • Moscow hosted a session of the general • The automotive industry of Kazakhstan • The development and expansion of ties be- staff of the armed forces of the Collective demonstrated a record volume of produc- tween the Turkic Culture and Heritage Security Treaty Organization member tion and exports. In the first quarter of Foundation and Kyrgyzstan was discussed states. Participants of the session dis- 2021, it produced around 20 thousand at the meeting between the President of cussed challenges and threats to military cars, buses and special equipment. Exports Foundation Gunay Afandiyeva and the security in the regions of Eastern Europe, amounted to two thousand vehicles in- Minister of Culture, Information, Sports Caucasus and Central Asia. They reaf- creasing by 84%. Production revenue of and Youth Policy of Kyrgyzstan Kairat firmed their common stance on threats to the sector reached almost $326 mil- Imanaliyev. The parties discussed the cur- military security. In 2021, the member lion. Membership in the Eurasian Eco- rent work done by the organization and the countries will have four joint exercises nomic Union (EEU) stimulates automo- projects that are being carried out. Minis- covering the Central Asia collective secu- bile manufacturers to increase their share ter Kairat Imanaliyev expressed the readi- rity region within the framework of the of local production in Kazakhstan and ex- ness of Kyrgyzstan to cooperate in imple- strategic exercise Combat Brotherhood ports to the EEU markets as well. Automo- menting projects of the organization 2021 (BelTA, 14.04.2021). tive producers recently launched several export-oriented local manufacturing cen- (Azernews.az, 13.04.2021). • The President of Azerbaijan Ilham Aliyev ters and plants for the production of agri- • Nine historical and cultural sites in Tajiki- received the head of Belarus Alexander cultural and other machinery (Qazaq TV, stan were inscribed in the UNESCO Lukashenko in Baku. The leaders dis- World Heritage Tentative List. The list in- cussed several issues of bilateral coopera- 16.04.2021). • According to the Deputy Chairman of the cludes the site of the ancient town of tion, including the restoration of Hisorak, Tali Hamtud, Ancient Pyan- Karabakh. During a ceremony attended by National Statistics Committee of Kyrgyz- the two leaders, several Memoranda of stan Azamat Orosbayev, Kyrgyzstan’s for- jekent, the site of the ancient town of San- Understanding were signed between the eign trade figures demonstrated a substan- jarshokh, Kalai Mug, Kum, Gardani Hisor, Ministries of Agriculture and Foreign Af- tial decline during January-February 2021. Hoja Muhammad Bashoro Mausoleum fairs of Azerbaijan and Belarus (Anadolu The volume of foreign trade in goods and Toxankorez irrigation system. The Agency, 15.04.2021). equaled $800 million, which is 18.3% less event became a significant contribution to than in the same period of 2020. Exports the recognition of Tajikistan’s rich cultural • Deputy Foreign Ministers of Central Asian of the country declined by 25.5%, while legacy. It will also improve its touristic at- states and China held an online meeting to the decrease in imports was lower and tractiveness in the future (Centrala- exchanged views on the preparation for amounted to 15%. Kyrgyzstan’s trade with sia.news, 15.04.2021). the second ministerial meeting within the the Eurasian Economic Union countries • The U.S. Agency for International Devel- “China + Central Asia” framework to be was equal to $393 million decreasing by held in the first half of May, 2021 in opment (USAID) organized a two-day almost 13% (Kabar.kg, 13.04.2021). webinar, “Women in Crafts: Opportunities China’s Shaanxi. Discussing the draft doc- Kazakhstan and Uzbekistan aim to in- uments proposed for consideration during • for Connectivity and Digital Trade” for crease bilateral trade to $10 billion women artisans and handicraft producers the next meeting, the participants noted through construction of the International that Central Asian states and China are in Afghanistan and Central Asia. Over 100 Center for Trade and Economic Coopera- female artisans and handicraft producers, friendly neighbors with high political mu- tion "Central Asia". The Prime Ministers tual trust and expanding mutually benefi- representatives from business women as- of both states recently laid a capsule at the sociations, non-governmental organiza- cial cooperation. The Ministers praised the construction site and inked a protocol on approaches of China in combatting the joint actions for the development of rail- tions from Central Asian states attended COVID-19 pandemic and supported the way transport. It is expected that the total the webinar. The main purpose of the synergy between the Belt and Road Initia- area of the center would comprise 400 hec- event was to better understand market de- tive and the development goals of Central tares and its daily capacity would equal to mand and help women artisans in organiz- Asia. (Asia-Plus, 14.04.2021). 35 thousand people and 5 thousand trucks ing their businesses (Tm.usembassy.gov, • The Minister of Foreign Affairs of Tajiki- in both directions (UzReport, 12.04.2021). stan Sirojiddin Muhriddin had a meeting 12.04.2021). • The Embassy of Kazakhstan in Japan or- with Sweden’s Foreign Minister and the • Authorities of Azerbaijan had a meeting ganized an inaugural meeting of the Asso- OSCE Chairperson-in-Office, Ms. Ann with representatives of the World Bank ciation of Kazakhs in Japan. The associa- Linde in Dushanbe. The parties discussed and the International Finance Corporation. tion is the first public organization to be a wide range of issues, including bilateral The country’s Energy Minister Parviz established in Japan to bring together the cooperation between the two countries and Shahbazov spoke about the country’s wind Kazakh nationals and ethnic Kazakhs liv- Tajikistan’s interactions with the OSCE. energy potential and “green energy” con- ing in the country to promote cooperation They also considered regional security is- cept. The country plans to increase the between entrepreneurs as well as the im- sues and the situation in Afghanistan. The share of renewable energy sources to 30% plementation of cultural and humanitarian Ministers agreed to deepen political and by 2030. Azerbaijan’s Energy Ministry projects. During the opening ceremony, economic cooperation in the fields of post- and the International Finance Corporation the Association of Kazakhs in Japan pandemic recovery, climate change and agreed to sign a memorandum of under- signed a Memorandum of Cooperation the fight against terrorism and extremism standing on the development of wind en- with “Otandastar” (Compatriots) Founda- (Asia-Plus, 15.04.2021). ergy (AzerNews, 12.04.2021). tion (Kabar.kg, 16.04.2021). • The NATO countries and the EU issued • Tajikistan, Uzbekistan and Kyrgyzstan • South Korea’s largest postal operator Ko- statements supporting new US sanctions plan to deepen inter-regional cooperation. rea Post issued commemorative stamps against Russia. The statements condemn Authorities and business circles of Tajiki- dedicated to the 30th anniversary of Ka- Russia’s attempts that demonstrate a sus- stan’s Sughd region and Kyrgyzstan’s Bat- zakhstan’s independence. Some of the tained pattern of destabilizing behavior ken oblast met in Uzbekistan’s Fergana re- stamps were sent to the collection of the and violations of Ukraine’s and Georgia’s gion to participate in a trilateral business museum of the Korea Post. The initiative sovereignty, which constitute a threat to forum entitled “Integration of Border Re- was made possible thanks to the collabo- Euro-Atlantic security. The statements gions - the Key to Development”. The ration between the Embassy of Kazakh- also underline NATO’s openness to mean- parties discuss industrial and agricultural cooperation. The representatives of Kyr- stan in the Republic of Korea and Korea ingful dialogue and constructive relation- Post as part of the celebration of the 30th ship with Russia when Russia’s actions gyzstan and Tajikistan visited an exhibi- make that possible (Apsny.ge, tion of products of Fergana region manu- anniversary of the independence of Ka- 15.04.2021). facturers (Asia-Plus, 14.04.2021). zakhstan (Kazinform, 15.04.2021). • St. Petersburg hosted the international par- • The business sector of Turkmenistan • The Afghan Ambassador to Azerbaijan liamentary forum “Global Challenges and demonstrated substantial growth during Amanullah Jayhoon met with the Minister Threats in the Context of the COVID-19 the first quarter of 2021. According to the of Culture of Azerbaijan Anar Karimov. Pandemic”. The event was attended by country’s State Statistics Committee, the The sides noted that the fraternal ties be- speakers of parliaments, intelligence offic- number of new firms increased by more tween the two countries contributed to the ers, representatives of international organ- than 44% compared to the same period of development of bilateral relations between izations of the CIS. The participants dis- 2020. The number of new companies in Azerbaijan and Afghanistan in many cussed the negative impacts of the pan- the agricultural sector surged by 88%, fields. Discussing the prospects for future demic and terrorism on all areas in many while growth in the manufacturing sector cooperation between the two countries, the countries and exchanged information on exceeded 53%. The growth of private parties, however, noted the untapped po- cooperation and taking measures to com- companies led to further reduction of the tential of cultural cooperation and stressed bat terrorism and extremism (Sng.today, market share of the state-owned enter- the importance of holding joint culture 15.04.2021). prises (Orient, 15.04.2021). days (Azernews.az, 12.04.2021).

Prepared by Zhengizkhan Zhanaltay and Kanat Makhanov