Before the Transcaspian gas pipeline project gets underway, multiple feasibility studies will be held to ensure that it is both technically and commercially feasible, and environmentally safe, former US Ambassador in Turkmenistan Allan Mustard said, Report informs, citing Turkmen media.
"In 1999 and 2008 two feasibility studies for large Transcaspian pipelines were published that make clear that there are no serious technical obstacles to such pipelines, and that environmental risks can be managed. The length of the proposed connector is only 42 nautical miles (about 78 km). Given prevailing prices for natural gas, commercial feasibility appears obvious," he noted.
He said the cost of a Connector is estimated at between $500 million and $800 million, and the feasibility studies will give a more accurate estimate.
"In the hydrocarbon industry that is a relatively small sum. Investors could include oil and gas companies already active in the region, who would benefit from additional gas supplies. There may also be opportunities for multilateral funding agencies to support the investment," Mustard believes.
According to the former ambassador, though Europe has embarked on a course toward green energy, the trans-Caspian project has long-term prospects.
"Achievement of 100% renewable energy use in Europe will take at least 30 years and quite probably longer. In the near term, Europe needs to reduce consumption of hydrocarbons with the worst carbon footprints, which are coal and oil. The most obvious and least environmentally damaging alternative during this transition is natural gas. After 30 years, the market for all hydrocarbons will shrink dramatically, of course. Natural gas may also be used to produce hydrogen. Combining this with Carbon Capture, Utilisation and Sequestration (CCUS) could be an attractive use of Turkmenistan’s vast gas reserves over the much longer term. There are currently a number of projects underway globally to prove scope and scale," Mustard said.
He said he foresaw no changes to the geopolitical landscape of Central Asia, particularly in light of Turkmenistan's and Azerbaijan's signing of the memorandum on the Dostluk oil field.
"Turkey has long been a friend of Central Asia and creation this year of the Organization of Turkic States symbolizes the friendship and willingness to collaborate of the countries involved," he noted.
He said if Turkmenistan were to export via a Caspian Connector from 5 to 12 billion cubic meters of gas a year, it could certainly expect respectable gross revenue.
" Obviously there would be expenses, including debt service, transit fees, taxes, and so on. Equally obviously, how much of this revenue would accrue to Turkmenistan versus how much to the well operators would depend on the terms of the production sharing agreements. All of that said, while we cannot predict what natural gas prices will be two years from now, a connector would almost certainly generate substantial profits for both Turkmenistan and the well operators," the diplomat said.
He believes that the pipeline would open up another outlet for Turkmenistan's gas in the region, diversifying Turkmenistan’s current customers: "I believe that is also in everyone's best interests."
"Energy-rich Turkmenistan has an opportunity to provide natural gas to a region that needs it, via a project that would cost relatively little and could be operating within two years of whenever funding became available. Energy experts who know more than I do call it in English a «no-brainer», meaning it is an obvious thing to do. I believe this would be a win-win-win project. It is beneficial for the countries and the businesses involved and beneficial for the people of Turkmenistan," the diplomat said.
Turkmenistan has long been discussing with Azerbaijan, Turkey, Georgia and the EU the possibility of building a Transcaspian gas pipeline with a capacity of 10 billion to 30 billion cubic meters of gas per year. For a long time, Moscow and Tehran were against its construction.
However, in August 2018, in Kazakhstan's Aktau, the presidents of Russia, Kazakhstan, Azerbaijan, Turkmenistan and Iran signed the Convention on the Legal Status of the Caspian Sea. According to the document, the consent of all the Caspian countries is not required to lay a pipeline on the seabed of the Caspian Sea, the issue of its construction is coordinated only by those states through which the pipeline will pass. In the case of the Transcaspian gas pipeline, these are Azerbaijan and Turkmenistan.
The EU has included the Trans-Caspian gas pipeline in the list of promising projects.
The total reserves of natural gas in Turkmenistan are estimated at 50 trillion cubic meters. Of these, the reserves of the Galkynysh field are more than 27 trillion cubic meters.
Currently, Turkmenistan exports natural gas to China and Russia. The construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline is also underway.