22 YEARS The Noah’s Ark #41 (1081) 9 November 2015 Published Since 1993 Weekly Newspaper HIGHLIGHTS ÜáÛÛ³Ý î³å³Ý ß³μ³Ã³Ã»ñà (³Ý·É. / ýñ³Ýë.) "Control Diabetes, Live a Full Life" On November 3 at the Opera and Ballet Theatre the State Youth Orchestra of Armenia conducted by Sergey Smbatyan, under the auspices of the First Lady Rita A. Sargsyan, performed Cartoon Non Stop charity concert for children that announced the start of "Control Diabetes, Live a Full Life" program See page 12 In This Issue Turkmenistan’s Pipeline Strategy: Ruling Party Plans 2,000 Referendum Building a Diversified Export Campaign Offices p.5 Infrastructure. Shirin Akiner EU official looks forward to new deal Turkmenistan has huge mineral from Turkmenistan through with Armenia p.6 wealth, including reserves of natu- Uzbekistan and Kazakhstan to Russians and Armenians Die within ral gas that are estimated to be the Russia and the other Soviet "the Week of Catastrophs" p.10 fourth largest in the world. republics. Consequently, in the However, when the country became early 1990s the main customers for Yevgeny Kaspersky is the Sixth independent, it lacked an export Turkmenistan gas were still former GIT Award Laureate p.11 Infrastructure. The existing gas Soviet republics. Armenian Genocide movie pipelines formed part of the Central ‘The Cut’ to screen in Tbilisi p.17 Asia-Centre network, which ran continued on page 2 9 November #41 (1081) 2015 2 www.nt.am The Noyan Tapan Highlights Turkmenistan’s Pipeline Strategy: Building a Diversified Export Infrastructure. Shirin Akiner Turkmenistan-Iran a pipeline from the Caspian region, to Shirin China, to terminate at a port on the Akiner, Pipeline Yellow Sea; from there the gas could be transported by tanker to Japan and, even- Professor of This was the first cross-border tually, the Republic of Korea. In 1997, Cambridge pipeline project to be implemented and the Mitsubishi Group, Exxon and CNPC University, initially, was the Turkmen Government’s formed a consortium to develop a pilot UK favored option for an export route. The project to connect gas fields in intention was to construct a pipeline that Uzbekistan and Turkmenistan via would run across Iran to Turkey and Kazakhstan to China’s eastern seaboard - thence to Europe (a distance of some an estimated distance of some of 6,000 1,400 km.). Construction of the first seg- From page 1 km. However, although the benefits of ment, from Korpeje in western Most of these new states, especially opening up Central Asian hydrocarbon Turkmenistan to Kord Koy in northern Armenia, Georgia and Ukraine, were in resources to Pacific markets were consid- Iran, commenced in 1994 and the pipe the midst of a severe economic recession erable, the cost of such a pipeline was became operational in December 1997. and were frequently unable to meet pay- deemed too high to be commercially There were hopes at this time that the US ments, thereby falling deeply into arrears. viable. Government was no longer as vehement- By the end of 1995, Turkmenistan was The project languished until April ly opposed to Iranian involvement in the owed close on US $2 billion. 2006, when President Niyazov visited project as had been the case previously. It was against this background that Beijing. While there, he signed an agree- Accordingly, international energy com- the Turkmen Government made plans to ment with President Hu on the supply of panies such as Royal Dutch/Shell and the create a multi-vectored network of export Turkmenistan gas to China, to be trans- French company Sofregaz bid for the routes to Europe, the Middle East and ported via Uzbekistan and Kazakhstan. contract to carry out the next phase of South Asia. It was a bold, ambitious idea. Thereafter, progress was rapid. In 2007, construction. Yet it soon became clear The distance to world markets and the President Gurbanguly Berdimuhamedov, that this was premature: there were still technical problems of constructing Saparmurad Niyazov’s successor, visited too many political and commercial obsta- pipelines across difficult terrain would China and oversaw the signing of a cles for Western companies to participate make such projects inordinately costly. Production Sharing Agreement between in the project. Undeterred, Turkmenistan Moreover, political factors, notably US CNPC and the Turkmen authorities to and Iran continued to expand bilateral sanctions against neighboring Iran, and develop the massive Bagtyyarlyk con- energy ties. In 2000, a second cross- bor- regional instability, particularly in tract territory. Located on the right bank der pipeline, from Artyk to Luftabad, was Afghanistan, would hinder the trans of the Amu Dar’ya, this previously unde- inaugurated and in January 2010, a third, boundary transportation of hydrocarbons. veloped area was known to contain sever- much larger pipeline was launched, run- In the face of such obstacles, many com- al large gas fields. The deal was signifi- ning from Dovletabat in south-eastern mentators doubted the feasibility of these cant not only because of the territory’s Turkmenistan (a field previously schemes. Yet the Turkmen authorities rich reserves, but because it was the first reserved for deliveries to Russia) to were not deterred: the new pipelines were major contract to be concluded with a Khangiran. These three pipelines togeth- vital to the country’s independence and to foreign company for the development of er would, at peak capacity, enable its economic development. Moreover, the Turkmenistan’s on-shore hydrocarbon Turkmenistan to make annual deliveries pipelines were a form of ‘energy diplo- reserves. The Chinese partners lost no to Iran of up to 20 billion cubic meters macy’, strengthening ties with regional time in launching the project: the follow- (bcm). states and laying the foundations for ing year CNPC signed bilateral deals strategic partnerships. Thus, despite the with the national gas companies of frustrations of protracted negotiations, Turkmenistan-China Turkmenistan, Uzbekistan and memoranda of intent and feasibility stud- Kazakhstan, giving them 50 per cent ies that were mothballed, and the frequent Pipeline (Trans-Asian) stakes in their respective segments of the hiatuses, slowly and determinedly the pipeline. Work on the pipe commenced Turkmens pursued their objectives. The Another vector of Turkmenistan’s concurrently in all the participating states twists and turns that punctuated this energy export strategy was the construc- and, less than two years later, was com- process mark the course of tion of a Trans-Asian gas pipeline. This pleted in record time. On 14 December Turkmenistan’s pipeline strategy, but project got off to an early start: in 1992 - 2009, in the presence of the Presidents of they also chart the complexities of scarcely a year after independence - Turkmenistan, China, Uzbekistan and regional relationships and the changing Japan’s Mitsubishi Corporation and the Kazakhstan, the formal valve-opening priorities of international actors. China National Petroleum Company ceremony was held. It was the first phase (CNPC) undertook feasibility studies for of what would become a major ‘gas cor- 9 November #41 (1081) 2015 The Noyan Tapan Highlights www.nt.am 3 ridor’ to the east. Over the following pipeline (estimated at $10 billion) were Turkmenistan- years, additional branches were con- beginning to look promising. It was structed. In 2015, the fourth branch, beginning to attract interest from region- Azerbaijan Pipeline known as ‘D’, was nearing completion; al states such as Bangladesh and China. (Trans-Caspian) initial shipments via this new pipeline The Ashgabat agreement, concluded would total 5 bcm, increasing annually to between the participating states in 2010, The fourth, and in many ways the reach 25 bcm within five years. Total addressed the practicalities of the under- most challenging scheme was the con- Turkmen gas exports to China by 2020 taking. Russia expressed support for the struction of a pipeline under the Caspian were expected to reach 65 bcm per year. project. So, too, did the USA - primarily Sea. The objective was to deliver because it regarded TAPI as preferable to Turkmen gas to Azerbaijan for on-ship- Turkmenistan- the rival scheme to construct a gas ment via Turkey to Europe. The idea was pipeline from Iran to the Indian sub-con- first put forward by US officials in 1996. Afghanistan-Pakistan- tinent (the Iran-Pakistan- India pipeline). In 1999, Royal Dutch/Shell became a India Pipeline (TAPI) American interest in Turkmen energy ‘strategic energy partner’ of was underlined by notable visitors such Turkmenistan, with the aim of develop- An even more ambitious scheme was as Neil Bush, head of the energy compa- ing the various gas deposits that would be the proposal to construct a pipeline link- ny South Oil Texas (and youngest broth- the main source of supply for the subsea ing Turkmenistan to the Indian sub-conti- er of former US President George W. pipeline. Concurrently, the US conglom- nent via Afghanistan. The first step Bush), who had a meeting with President erates General Electric and the Bechtel towards the realisation of this project Gurbanguly Berdimuhamedov in Group carried out a feasibility study for came in May 1997, when the US petrole- Ashgabat in February 2010. the pipeline. The possibility of transport- um company Unocal and its strategic International investors, however, ing Turkmen gas to Romania was also partner, the Saudi Arabian company were reluctant to commit to TAPI as the being considered. However, that same Delta Nimir, signed a memorandum of security situation in Afghanistan was still year the large Shah Deniz gas field was agreement with the Turkmenistan unstable. Once again, it seemed as though discovered in the Azerbaijani sector of Government for the construction of oil the project would be postponed indefi- the Caspian Sea. This dramatically and gas pipelines from hydrocarbon nitely.