The region’s major powers are in a tussle to control its rich energy sources.
Central Asia is rapidly emerging as the key playing field in the contest to access energy resources and the leverage they offer. The new Great Game is played out once again in the region, only this time it is not over political or territorial influence, but over the vast raw material deposits that are in the possession of the former Soviet Union republics, especially those situated by the Caspian Sea. The Caspian’s share of oil and gas global exports is set to rise to 9 and 11 percent, respectively, in the coming 20 years. Much is at stake.
Russia, although not a direct producer, was and still is – given the developed pipeline network – supervising much of an energy transit from Central Asia. The Central Asia-Center gas pipeline system, the first line of which was completed in 1960, makes for a good case study. It allows both Uzbek and Turkmen gas to be delivered to Russia, which then resells it at a profit to energy-hungry Europe or uses it for domestic purposes. Moscow exercises its influence over the region and as a consequence gains both politically and economically.
In the wake of the collapse of the Soviet Union, Central Asian states sought to loosen Russia’s firm grip. An independent complex pipeline system was a priority for transporting the resources outward. Given that the Caspian Sea is landlocked, gas and oil need to cross several borders before reaching an end customer. This requires a very substantial investment, yet energy diversification in Central Asia is moving steadily ahead.
State of Play
Kazakhstan is the leading oil producer in the region, with output of roughly 1.6 million barrels per day (bbl/day), of which approximately 90 percent is exported. The Baku-Tbilisi-Ceyhan network that came online in 2006 is not the only Kazakh attempt to break Russia’s monopoly. Astana is already one of the most significant oil suppliers to China. The first pipeline connecting the Caspian shore with China’s Xinjiang province, is one of the longest links in the world at nearly 2300 km. China in fact controls around 20 percent of Kazakhstan’s oil production and is its key trade partner. Bilateral trade should reach $40 billion next year.
Turkmenistan is the main gas exporter and possesses the largest gas deposits in Central Asia and one of the richest in the world. It has similar goals. The first Turkmen undertaking to break Russia’s transit dominance was a pipeline to Iran built in 1997. The recent major venture – the Central Asia-China gas pipeline – allows Ashgabat to transfer its hydrocarbons directly to China. Interestingly from a regional perspective, it also offers to connect spurs from Kazakhstan and Uzbekistan.
For the complete article, please see The Diplomat.
