Caspian pipeline needs political sea-change

In October, the European Union made it clear it would back the construction of a pipeline which will take Kazak and Turkmen gas to international markets after crossing the Caspian Sea and transiting Azerbaijan and Turkey.

Tehran said last week that any decision on TCP requires a consensus from all the states around the sea – Iran, Russia, Kazakstan, Turkmenistan and Azerbaijan.

Russia insists no pipeline can be laid until the status of the Caspian Sea is defined.

NBCentralAsia analysts say the EU's desire to fund the costly and labour-intensive pipeline project could yet be blocked by the difficulty of achieving a compromise among the Caspian states.

"There is a project, funds have been found for it, but the main issue remains unresolved – the politics, and specifically how Russia and Iran will react," said Kazakstan-based political scientist Dosym Satpaev. "The pipeline may face political resistance from Russia and Iran given that the Caspian Sea's status has not been decided."

Caspian states are due to meet early next year for further talks on the long-running dispute over ownership of the sea. At the Tehran summit the five countries involved will address the delicate question of how the sea should be divided up among them.

Azerbaijan, Kazakstan and Russia favour a division into national sectors separated by a median line. Iran, however, wants a straight division into five equal parts.

NBCentralAsia's political scientists say investing in the project would carry a high risk given the uncertainty surrounding even those states that have expressed an interest in taking part. This applies most of all to Turkmenistan, the major exporter of Central Asian gas, where the death of President Saparmurat Niazov on December 21 has opened up concerns about a political vacuum and a sustained period of instability.

NBCentralAsia analyst Eduard Poletaev said western countries will work with Kazakstan and Azerbaijan to reach a necessary agreement among littoral states. He said a great of progress was made this year in building political support for the TCP, with US Senator Richard Lugar's visit to Kazakstan and the South Caucasus, President Nursultan Nazarbaev's trips to Washington and Brussels, and Germany’s work to change EU strategy in Central Asia.

"After Lugar's visit it was already clear that Caspian oil must be free of Iranian and Russian influence," he said. "Now that it is apparent that Russian energy policy is aggressive in nature, the EU will make the Caspian region a priority." Institute for War & Peace Reporting