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Pipeline Geopolitics: Major Turnaround. Russia, China, Iran Redraw Energy Map

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posted on Jan, 13 2010 @ 09:00 AM
I came upon this immensely important article written by Ambassador M K Bhadrakumar, who was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

While most of US MSM is fixated on what Pope is saying about Movie, how many Muslim sneezed or how many women Tiger slept with important events are developing in world completely ignored. Events such as these are redrawing Middle East power and energy structure which in the end affects each and every person in the world. Read on to find out:

The inauguration of the Dauletabad-Sarakhs-Khangiran pipeline in early January connecting Iran's northern Caspian region with Turkmenistan's vast gas field may go unnoticed amid the Western media cacophony that it is "apocalypse now" for the Islamic regime in Tehran.

The event sends strong messages for regional security. Within the space of three weeks, Turkmenistan has committed its entire gas exports to China, Russia and Iran. It has no urgent need of the pipelines that the United States and the European Union have been advancing. Are we hearing the faint notes of a Russia-China-Iran symphony?

The 182-kilometer Turkmen-Iranian pipeline starts modestly with the pumping of 8 billion cubic meters (bcm) of Turkmen gas. But its annual capacity is 20bcm, and that would meet the energy requirements of Iran's Caspian region and enable Tehran to free its own gas production in the southern fields for export. The mutual interest is perfect: Ashgabat gets an assured market next door; northern Iran can consume without fear of winter shortages; Tehran can generate more surplus for exports; Turkmenistan can seek transportation routes to the world market via Iran; and Iran can aspire to take advantage of its excellent geographical location as a hub for the Turkmen exports.

We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world's largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.

The Turkmen-Iranian pipeline mocks the US's Iran policy. The US is threatening Iran with new sanctions and claims Tehran is "increasingly isolated". But Mahmud Ahmadinejad's presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington's coercive diplomacy hasn't worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) - and, worse still, made it look routine.

There are subplots, too. Tehran claims to have a deal with Ankara to transport Turkmen gas to Turkey via the existing 2,577km pipeline connecting Tabriz in northwestern Iran with Ankara. Indeed, Turkish diplomacy has an independent foreign-policy orientation. Turkey also aspires to be a hub for Europe's energy supplies. Europe may be losing the battle for establishing direct access to the Caspian.

Second, Russia does not seem perturbed by China tapping into Central Asian energy. Europe's need for Russian energy imports has dropped and Central Asian energy-producing countries are tapping China's market. From the Russian point of view, China's imports should not deprive it of energy (for its domestic consumption or exports). Russia has established deep enough presence in the Central Asian and Caspian energy sector to ensure it faces no energy shortage.

What matters most to Russia is that its dominant role as Europe's No 1 energy provider is not eroded. So long as the Central Asian countries have no pressing need for new US-backed trans-Caspian pipelines, Russia is satisfied.

During his recent visit to Ashgabat, Russian President Dmitry Medvedev normalized Russian-Turkmen energy ties. The restoration of ties with Turkmenistan is a major breakthrough for both countries. One, a frozen relationship is being resumed substantially, whereby Turkmenistan will maintain an annual supply of 30bcm to Russia. Two, to quote Medvedev, "For the first time in the history of Russian-Turkmen relations, gas supplies will be carried out based on a price formula that is absolutely in line with European gas market conditions." Russian commentators say Gazprom will find it unprofitable to buy Turkmen gas and if Moscow has chosen to pay a high price, that is primarily because of its resolve not to leave gas that could be used in alternative pipelines, above all in the US-backed Nabucco project.

Third, contrary to Western propaganda, Ashgabat does not see the Chinese pipeline as a substitute for Gazprom. Russia's pricing policy ensures that Ashgabat views Gazprom as an irreplaceable customer. The export price of the Turkmen gas to be sold to China is still under negotiation and the agreed price simply cannot match the Russian offer.

Fourth, Russia and Turkmenistan reiterated their commitment to the Caspian Coastal Pipeline (which will run along the Caspian's east coast toward Russia) with a capacity of 30bcm. Evidently, Russia hopes to cluster additional Central Asian gas from Turkmenistan (and Kazakhstan).

Fifth, Moscow and Ashgabat agreed to build jointly an east-west pipeline connecting all Turkmen gas fields to a single network so that the pipelines leading toward Russia, Iran and China can draw from any of the fields.

Indeed, against the backdrop of the intensification of the US push toward Central Asia, Medvedev's visit to Ashgabat impacted on regional security. At the joint press conference with Medvedev, Berdymukhammedov said the views of Turkmenistan and Russia on the regional processes, particularly in Central Asia and the Caspian region, were generally the same. He underlined that the two countries were of the view that the security of one cannot be achieved at the expense of the other. Medvedev agreed that there was similarity or unanimity between the two countries on issues related to security and confirmed their readiness to work together.

The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered. Russia is now planning to double its intake of Azerbaijani gas, which further cuts into the Western efforts to engage Baku as a supplier for Nabucco. In tandem with Russia, Iran is also emerging as a consumer of Azerbaijani gas. In December, Azerbaijan inked an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline.

The "big picture" is that Russia's South Stream and North Stream, which will supply gas to northern and southern Europe, have gained irreversible momentum. The stumbling blocks for North Stream have been cleared as Denmark (in October), Finland and Sweden (in November) and Germany (in December) approved the project from the environmental angle. The pipeline's construction will commence in the spring.

The $12-billion pipeline built jointly by Gazprom, Germany's E.ON Ruhrgas and BASF-Wintershall, and the Dutch gas transportation firm Gasunie bypasses the Soviet-era transit routes via Ukraine, Poland and Belarus and runs from the northwestern Russian port of Vyborg to the German port of Greifswald along a 1,220km route under the Baltic Sea. The first leg of the project with a carrying capacity of 27.5bcm annually will be completed next year and the capacity will double by 2012. North Stream will profoundly affect the geopolitics of Eurasia, trans-Atlantic equations and Russia's ties with Europe.

To be sure, 2009 proved to be a momentous year for the "energy war". The Chinese pipeline inaugurated by President Hu Jintao on December 14; the oil terminal near the port city of Nakhodka in Russia's far east inaugurated by Prime Minister Vladimir Putin on December 27 (which will be served by the mammoth $22-billion oil pipeline from the new fields in eastern Siberia leading to China and the Asia-Pacific markets); and the Iranian pipeline inaugurated by Ahmadinejad on January 6 - the energy map of Eurasia and the Caspian has been virtually redrawn.

The year 2010 begins on a fascinating new note: will Russia, China and Iran coordinate future moves or at least harmonize their competing interests?

posted on Jan, 13 2010 @ 09:14 AM
This news just came in and I believe is related to this thread

Turkish PM Recep Tayip Erdogan met Russia's president and PM in Moscow, with energy high on the agenda.

The Turkish government recently agreed to support Russian plans for a major new gas pipeline - South Stream - across the Black Sea into Europe.

Turkey PM Erdogan in Russia for gas talks

Not only Turkmenistan but Turkey is also in talks with Russia over gas pipeline. This is another image of Russia reaffirming their grasp on Caspian Basin.

[edit on 13-1-2010 by December_Rain]

posted on Jan, 13 2010 @ 10:20 AM
reply to post by December_Rain

I think the biggest concern here is how quickly the rest of the world is moving to Natural Gas and how the US is still stuck on coal and importing oil. Although I do see Obama pushing our Energy plan towards Natural Gas after the State of the Union Adress. Atleast we have huge reserves of natural gas here.

On a side note:
How about an Iranian car made in china, sold in Europe, and fueled by Russian Natural Gas Stations through out Europe.

[edit on 13-1-2010 by sensible thought]

posted on Jan, 13 2010 @ 10:22 AM
Good for them! Great news in my opinion. Health and wealth to all!

Maybe there will be a new number one producer?

posted on Jan, 13 2010 @ 10:47 AM
reply to post by Namaste

Hard to say at this point. But you are missing the big picture how Russia and China have entered US dominated Middle East under it's nose and have established a solid base there. Now any action of US in Middle East will have to be taken keeping in mind the interest of Russia and China as well. Which I think is good as it will bring balance to power in the region.

posted on Jan, 13 2010 @ 10:58 AM
Iv'e said it countless times.

China brings suitcases of money to do business.

US brings Guns and Threats to do business.

Who would you do business with.

posted on Jan, 13 2010 @ 11:54 AM
reply to post by December_Rain

I assure you that I am not missing the point. I personally think it's a good thing. International Checks and Balances anyone?

posted on Jan, 15 2010 @ 06:26 PM

Originally posted by December_Rain
Hard to say at this point. But you are missing the big picture how Russia and China have entered US dominated Middle East under it's nose and have established a solid base there.

Actually there hasn't been much change in the Middle East (the true geographic ME) as far as geopolitical influence goes. US has been and remains the key influence in its traditional playground - Saudi Arabia, Kuwait, UAE, Iraq.

As for the region which is discussed in your posts - it Central Asia, specifically the Caspian Sea basin, rather than Middle East. This region has never really been US dominated, and never really had much US influence. In fact the majority of the players - Azerbaijan, Georgia, Turkmenistan, Kazakhstan, Uzebekistan - have always been within Russia's sphere of influence. Iran has and remains outside of either side's influence, and can be considered the third key player (or fourth if you count China).

So really it is US that is the newcomer to the region, and that is trying to displace Russia. But otherwise your thread is really relevent in that this is where the "Middle East" of the future will be: oil, extremism, wars, coups - the whole package.

As for the balance of power - it is questionable whether the changes will be beneficial to anyone. The problem is that someone always wants a bigger slice of the pie than others (US in this case), and could be willing to utilize their military/political advantage to obtain it, thereby actually decreasing balance.

posted on Jan, 16 2010 @ 03:55 AM
reply to post by maloy

Actually after the fall of U.S.S.R it lost entire influence in Caspian Sea Basin when it had to withdraw it's fleet of 7 warships in that region, USA has been constantly trying to gain influence in Caspian Sea Basin (for eg. USA/Israel support to Georgia which led to 7 day Russia Georgia war last year), Missile Defense Shield, mobilising Navy Warships in the region...and it is only now Russia and China has gained influence back in the region without relying on USA control over pipelines.

The future of energy is not oil but gas and anyone who controls the Caspian Sea Basin equally controls Middle East.

posted on Dec, 2 2011 @ 12:35 PM
Moscow issues Trans-Caspian Project warning

" The Soviet art of socialist realism used to be defined as "socialist in substance, national in form". Threats to prevent the construction of a trans-Caspian gas pipeline by military force are also a form of Kremlin art: bluff in their substance, even if brutal in their form. "


Russian Gas Society president and vice-chairman of the Duma, Valery Yazev (dubbed "Gazprom's chief lobbyist"), has publicly reminded Turkmenistan that it lacks military protection in the Caspian Sea, and it risks a "Libyan scenario" by joining the EU's trans-Caspian project. He dismissed the value of United Nations General Assembly support for Turkmenistan's neutrality and multivector policy.

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