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01/08/18

Iran and the Trans-Caspian Gas Pipeline

By Bahman Aghai Diba, PhD Int. law


Trans-Caspian Gas Pipeline (TCP) is a project to transport natural gas through a submerged pipeline in the Caspian seabed from Turkmenistan and partly from Kazakhstan to Baku in Azerbaijan and eventually to Europe, circumventing Russia and Iran (1). Turkmenistan has one of the biggest gas resources in the world, the third biggest after Russia and Iran (2). Since its independence (1991) and discovery of large gas resources in Turkmenistan, it has tried to construct the TCP. Construction of this pipeline will end the monopolistic status of Russia in export of gas to much of EU. Iran has opposed it for several reasons but both Iran and Russia claim that the reason for their opposition to the TCP is protection of environment in the Caspian Sea. The US and EU have supported construction of the TCP in the past in order to diversify their supplies and also end the Russian exclusive situation.

Rejection of the TCP by Russia has several important reasons:

  1. Russia makes a lot of money from export of gas to the EU. The Russians have the higher hand in determining the gas prices in the lack of serious rivals and they do not want Turkmen (and Kazakhstan and Azerbaijan) resources to be in the Eu market through EU. The EU gets one fourth of its entire gas needed for consumption from Russia.
  2. Export of gas from Russia to the EU region is part of the most important tools of Russia for putting pressures on and also rejecting the pressures from the Western countries (including the US, indirectly). The recent crisis in Ukraine on Crimea showed how important is this tool for Russia. Naturally the Russians do not like to facilitate the emergence and progress of a rival in this market.
  3. Russia prefers that Turkmenistan and Kazakhstan use the routes through Russia for exporting their gas.
  4. The TCP will open the way for more presence of the West in the Caspian region especially for construction of a pipeline favored by the EU and the US. Turkmenistan will surely prefer (even forced) to use the Western sources for this project. This is what the Russians do not want.

Iran as the country with second largest gas resources in the world, is in the best position to act as a rival to Russia in the EU markets but so far it has not taken any step in this direction. At the same time, the gas projects in the south of Iran (in the Persian Gulf and Sea of Oman) are directed towards India and China with the assistance from Russia and China. Iran is facing difficulties in getting its gas resources to the global markets due to the political issues in the relations of Iran with other countries, especially the West. (3)

The pipeline of Iran to Pakistan and India, called Peace Pipeline, has been stagnant due to the economic sanctions against Iran and at the moment, the gas pipeline from Turkmenistan to Afghanistan, Pakistan and India (called TAPI) is moving faster to replace it (construction stage of it starts in early 2018). Russia supports it too because it is part of the plans that get the rival resources towards far away places in India and China and away from the EU market.

Iran’s opposition to TAP has several reasons:

  1. Iran is opposed to plans that increases the role of Azerbaijan Republic in the Caspian Sea both as the ally of the US and Israel and also the main challenger of Iran’s positions in the legal regime of the Caspian Sea (which directly affects the share of Iran in the Caspian Sea). Azerbaijan has been supporting establishment of the Trans-Caspian Gas Pipeline because it sees opportunities to both add its resources to it and get transit rights and play a more important role in the supply of energy to the EU region. Azerbaijan has been a strategic partner to the West since its independence in 1991. (4) and (5).
  2. Trying to help its ally, the Russians, in this case. Iran has gone so far in this field that despite its national interests, it is not ready to use this way and others (such as the Nabucco project) (6) to harm the monopolistic domination of Russians in the European gas market. This policy is connected to the close relations and reliance of the Islamic Republic of Iran in combatting the West and its allies in the region (cooperation of two countries in Syria and their activities to circumvent the unilateral, and multilateral sanctions, cooperation in the nuclear energy projects, investment of Russia in Iranian energy sectors and so on.) The deputy minister of energy of Iran has said: “Iran is not after competing with Russia in the European gas market.” (7)
  3. Putting pressures on Turkmenistan and Azerbaijan to pay more attention to the positions of Iran (regarding the share of Iran from the Caspian Sea). Iran has been talking about 20 percent but now it is ready to cut those demands. (8). However, Iran will try to get anything more than 13 percent that others are trying to give Iran out of the Caspian Sea. This could mean something between 15 to 17 percent. Adding anything to Iran’s share of the Caspian Sea, requires cutting something from the extent demanded by others especially the so-called southern Caspian Sea states (Azerbaijan and Turkmenistan in this case).
  4. Turkey is one of the serious customers of Iranian gas and reaching of cheaper Turkmenistan gas from the Trans-Caspian route may affect that market fundamentally for Iran.
  5. Iran has been trying seriously, along with Russia, to keep the Western countries out of the military and civilian activities in all of the Caspian Sea region. At the same time, the newly established countries in the coats of the Caspian Sea (Azerbaijan, Kazakhstan and Turkmenistan), especially Azerbaijan Republic, have been trying to increase the cooperation with the EU and US on security and energy issues if the Caspian Sea (9) Iran and Russia have insisted that a part of the exiting and future legal regime of the Caspian Sea is keeping the non-coastal states out of the Caspian affairs. Construction of trans-Caspian pipeline needs the investment, technology and presence of the Western countries and their companies because Turkmenistan is interested to use the Western resources in the project that support establishment of the TCP. Therefore, one of the reasons of Iran (and Russia) in opposing the Trans-Caspian pipeline favored by the EU and US is this issue.
  6. Putting pressure on Turkmenistan to use the route from Iran. Although Iran is not really interested to play the role of a facilitator for the export of gas from a potential rival in the market (10), it is interested in the case of failing to find proper ways for its exports (which is having difficulties due to the political problems of Iran and its bad relations with the West) to boost the role of transit country.
  7. To ask for a better price of Gas from Turkmenistan (11). Turkmenistan can provide cheaper gas for Iran, even as compared to the domestic productions of Iran.
  8. Persuading the EU to ask Iran for the gas supply. This may put a pressure on the EU to push for facilitating Iran’s participation in the regional gas projects and even disregard or cancellation of some the sanctions against the oil and gas sector of Iran.

Of course, this kind of projects are always a threat to the environment all over the world and in order to reject the arguments of Iran and Russia about the environmental issues, Turkmenistan has announced that:

  1. The issue of laying a submerged gas pipeline in the Caspian Sea is related only to the countries that the pipeline crosses their territories. Apparently, now that Modified Median Line (MML) is getting the upper hand in division of the Caspian Sea, it may be inserted in the draft convention for the Caspian legal regime that will be reviewed and possibly adopted in the next summit conference of the Caspian Littoral states in Astana, capital of Kazakhstan, in the middle of the 2018. The path of this pipeline in the Caspian seabed may not pass the Russian and Iranian territories.
  2. Turkmenistan will observe strictly the contents of Framework Convention for Protection of Marine Environment of the Caspian Sea (called Tehran Convention of 2006). However, the contents of this convention are not very clear and since there is no general convention on the Caspian legal regime, it is not clear on the responsibly for pollution.

The issue of Trans-Caspian Sea Pipeline is more important now that Turkmenistan is getting under pressures from other markets. Iran stopped getting gas supplies from Turkmenistan after some disputes on gas prices. (12) Russians are not letting them to use the Russian route as before. China is now the only important way.

The issue of this pipeline in the Caspian Sea is so important they some analysts are telling: a unilateral action of Turkmenistan or in cooperation with Azerbaijan, may lead to armed conflicts. a professor of Russian history has said: “Russia is strongly against the project for Trans-Caspian pipeline carrying gas from Turkmenistan to Azerbaijan and may threaten to use military force should the two former Soviet republics decide to go ahead regardless.” (13). Also, an analyst has said “Russia could resort to old-fashioned saber-rattling techniques to disrupt the construction of any pipeline that Moscow opposed.... conflict could take place, most likely, in less civilized forms.... And in that case, the Russian Caspian Flotilla, which de facto dominates the sea, does not require the agreement of other countries.” (14)

 Although some officials from the coastal states of the Caspian Sea are talking about finalization of the Draft Convention on the Legal Regime of the Caspian Sea, and agreement on the criteria to delimit the Caspian Sea among the littoral states (15), it seems the problem is still not resolved and parts of the draft convention are blank. Iranian officials have indicated that this issue may even be followed out of the context of the Convention on the Legal Regime of the Caspian Sea. (16). This means that the issue of TCP will remain a subject of conflict in the Caspian Sea. At the same time, Islamic Republic of Iran’s approach to this issue is yet another dimension of compromising national interests of Iran in favor of political and ideological games. Many policies of the Islamic Republic of Iran in the region, including Caspian, has nothing to do with national interests of Iran as a country with the huge gas resources and they are mostly related to the conflicts of Iranian current government with the Western countries especially the US and their allies in the region.

sources:

  1. en.wikipedia.org/wiki/Trans-Caspian_Gas_Pipeline
  2. pgjonline.com/2015/08/12/forecasting-irans-natural-gas-production-consumption/
  3. www.payvand.com/news/14/jun/1133.html
  4. thediplomat.com/2014/10/russia-and-iran-lock-nato-out-of-caspian-sea/
  5. www.worldpoliticsreview.com/articles
  6. www.payvand.com/news/09/nov/1240.html
  7. econews.com/fa/content/514667
  8. www.payvand.com/news/17/dec/1066.html
  9. thediplomat.com/2014/10/russia-and-iran-lock-nato-out-of-caspian-sea/
  10. www.eurasianet.org/node/81821
  11. www.eurasianet.org/node/81821
  12. www.eurasianet.org/node/86481
  13. www.payvand.com/news/17/sep/1081.html
  14. www.eurasianet.org/node/86481
  15. radiofree.org/russia-says-caspian-legal-status-resolved-agreement-ready-for-signing/
  16. www.payvand.com/news/17/dec/1066.html

About the author:
Bahman A Diba, PhD International Law of the Seas, is the author of several books. His latest books were published in 2011:

Problems of the Islamic Republic of Iran & Iran and the International Law of the Seas and Rivers

 

... Payvand News - 01/08/18 ... --



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