Russia, the Caucasus, and Central Asia by unknow

Author:unknow
Language: eng
Format: epub
Tags: Social Science, Women's Studies, Political Science, General
ISBN: 9781315501727
Google: bHqTDAAAQBAJ
Publisher: Routledge
Published: 2016-07-01T13:37:10+00:00

In 1990–91, the output of natural gas in Kazakhstan, Azerbaijan, and Turkmenistan exceeded 100 billion cubic meters a year, about 4 percent of the world production; more than 80 percent of this was extracted in Turkmenistan. However, by the middle of the 1990s it had fallen by half, due predominantly to the drastic cut of production in Turkmenistan caused by a dispute with Gazprom over export quotas and non-payment, as well as by other difficulties due to the collapse of the USSR. In 1997 the production of gas in Turkmenistan was down to about 10 billion cubic meters a year—the level of domestic consumption—as a result of Gazprom’s refusal to transport Turkmenistan’s natural gas via Russian territory, in order to put economic and perhaps political pressure upon Ashkabad. (See Table 4.9.)

The International Gas Union forecasts that by 2030, world natural gas consumption may rise to 3,500–4,000 billion cubic meters a year.17 The exportable gas potential of the Caspian region in the first two decades of the twenty-first century is estimated, at its maximum, to be about 170 billion cubic meters a year. If both of these forecasts are accurate, then the Caspian countries will be able to satisfy 4–5 percent of the world demand for gas. About two-thirds of this potential gas export—approximately 120 billion cubic meters a year—may be produced by Turkmenistan. However, this is an extremely optimistic prediction, which may be fulfilled only if the transportation problems are settled and significant funds are invested in the local gas industry.

Russian reserves of gas are from 12 to 16 times larger than those of the Caspian region. Russia already exports about 200 billion cubic meters of gas, and its share of world production is somewhere between one third and one quarter. There is every reason to believe that in the coming ten to fifteen years Russia will remain the largest producer and exporter of gas. Iran, too, has much greater gas resources than the newly independent Caspian states: up to 20 trillion cubic meters in gas fields in the southern part of the country. Thus the general outlook is that gas exports from the Caspian countries will play only a secondary role on the world energy market.

However, with some growing regional markets for gas such as southern Europe, the Mediterranean, and Turkey, Caspian countries may edge out Russia because their gas is more competitive than Russia’s. If so, then Russia will be deprived of a large part of its export earnings, which could be quite painful. To avoid that, Gazprom seems to be trying to direct the eventual flow of Turkmenistan’s gas to South Asia, Pakistan, and India, where Russian gas industry has no serious interests. That could explain, in part, why Gazprom canceled the transportation of gas from Turkmenistan to Europe.

The prospects for development of oil and gas deposits both in the Caspian and in Russia, and hence the results of their eventual competition, vitally depend on the amount of foreign capital that is invested into their energy industries.

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