As we have discussed many times previously, the existing pipeline architecture of Central Asia represents the regional imperialism of Cold War Russia, despite Turkmen and Kazakh flirtations with new Trans-Caspian pipeline projects to Azerbaijan to circumvent the Russian control over exports to Western Europe.

A recent article by Robert M. Cutler of Carleton University in The Asia Times argues that Gazprom’s attempts to build a monopoly in Central Asia are in some respects backfiring, as even the Azeris are refusing offers from Russia to purchase their gas reserves at market rate. As the article notes:

“…New prospects for a Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Azerbaijan have been receiving deserved attention in recent months. However, another project to pipe energy resources from the western to the eastern shore of the Caspian Sea also demands attention, with implications that loom as large as those of the TCGP. This is an overland oil pipeline that Kazakhstan intends to build from the Tengiz field, in the northwest of the country, to the port of Aqtau in the southwest.

The country’s national oil and gas company, KazMunaiGaz, the Agip KCO consortium developing the offshore Kashagan deposit and the TengizChevrOil joint venture agreed after long discussions to a first memorandum of understanding in January 2007. Before that, an earlier variant would have seen the oil transshipped to Mahachkala, Dagestan, in the Russian Federation, for the pipeline ending at Novorossiisk on the Black Sea. This appears to be no longer under consideration.

At present, about four-fifths of Kazakhstan’s oil has nowhere to go but through Russia’s pipeline system. Half of the rest is exported through the Georgian Black Sea port of Batumi, the seaside capital of the formerly rebellious Georgian province of Ajaria. The other half of the rest goes to China, which wishes to quadruple its oil imports from Kazakhstan from 100,000 to 400,000 barrels per day (bpd) by the end of the decade, although Kazakhstan, perhaps because of its experience with Russia, is hesitating at the prospect.

…For many years, Russia used promises and cajoling to discourage Kazakhstan from signing a trans-Caspian agreement. It was also planned to more than double the volume of the CPC pipeline from 615,000 to nearly 1.3 million bpd. The failure to accomplish this is due partly to internal Russian bureaucratic and inter-regional squabbling and partly to the inability or unwillingness of the Russian presidency to overcome those disagreements. Regardless of the reason, the result is the same for Kazakhstan.

Recently, Gazprom offered to buy natural gas from Azerbaijan at market prices. Azerbaijan must feel the same way Kazakhstan does about Russia in this respect, because the offer was refused. Events – and not least the rise in the price of oil making more possibilities economically feasible – have begun to accelerate the overtaking of Russia’s near-monopoly on transport of Caspian Sea basin energy resources.”