Page 8 - FSUOGM Week 49 2019

FSUOGM COMMENTARY FSUOGM
2001. BP immediately suspended drilling in the area, and the development of the field was frozen.
Meanwhile, KEPCO in 2010 reached an agreement with Brazil’s Petrobras on develop- ing two exploration blocks including the Alov/ Alborz block. Petrobras pulled out when sanc- tions by the US were levied on Iran.
In February 2016, the two countries agreed to put aside their dispute and jointly work on the field.
Warming relations
During the meeting, the Iranian president described the relationship between Tehran and Baku as “good” and reminded the Azerbaijani official of Iran’s historical connections with its northern neighbour.
Rouhani said, “the Islamic Republic of Iran and the Republic of Azerbaijan have been able to take very good steps in the development of relations by relying on wisdom and tactfulness.”
Noting that the two countries have growing relations and business deals despite the US sanc- tions on Tehran, Rouhani said, “I hope that the recent agreements that we have made with the President of Azerbaijan in Baku will be imple- mented as soon as possible.”
“Cooperation in carrying out joint pro- jects, especially Khoda Afarin Dam and Power Plant can transform the process of deepening ties between the two countries,” said Rouhani, adding, “constructing power plants in border areas is very important, and we hope that the joint project of Rasht-As- tara Railway, which has been agreed upon, is implemented sooner.”
For his part Mustafayev noted that bilateral trade between the two sides had grown consid- erably in recent years, noting “The volume of trade between the two countries has increased threefold since 2014 and the number of Iranian companies working in the Republic of Azerbai- janhasincreased50%fromayearago”.™
PIPELINES & TRANSPORT
Turkmenistan enlists consultant for TAPI
TURKMENISTAN
RINA will act as technical consultant for the pipeline’s Turkmen section.
TURKMEN national gas company Turkmen- gaz has hired Italian consultant RINA for the construction of its section of the Turkmenistan– Afghanistan–Pakistan–India Pipeline (TAPI).
Under a contract priced at $13mn, RINA will act as a technical consultant for supervision and project support services for TAPI’s 214-km Turkmen gas pipeline section, as well as the building of two compressor stations. Up to 50 RINA personnel will be working with Turkmen- gaz, the Italian firm said.
TAPI, a $10bn project that has been under discussion since the 1990s, aims to provide up to 33bn cubic metres per year of gas from fields in eastern Turkmenistan to Afghanistan, Pakistan and India. Its Turkmen portion is expected to cost $1bn.
Turkmenistan formally broke ground on the pipeline in December 2015 in a lavish ceremony involving officials from all four participating countries. But since then only limited ground work if any has taken place, FSU OGM under- stands, despite claims to the contrary by Turk- men officials.
The head of the Turkmen-led TAPI oper- ating consortium went so far as to say in Feb- ruary 2018 that the Turkmen section had been finished, with the focus moving to work in Afghanistan. But only in April this year did
Russian pipe mill Chelpipe report that it had won a contract to supply the entire 214 km of pipes needed for the Turkmen section, casting doubt on this claim.
TAPI has struggled because of geopolitical realities. Afghanistan is still a hotbed for terror- ism, making attacks on what would be a major infrastructure development highly likely. India is also reluctant to trust long-time adversary Paki- stan with its energy security.
The project has been further undermined by the fall in global LNG prices, with India and Pakistan now seeing LNG imports as a cheaper and more secure option. Both countries have plans to expand their LNG regasification capac- ity significantly over the past decade. Sources with contacts in the Turkmen government have told FSUOGM that India has effectively pulled out of the venture, while Pakistan too has cold feet.
TAPI is due to reach its financial close in early 2020, but there is no evidence that Turk- menistan has secured the investors it needs. The Saudi-based Islamic Development Bank (IDB) is understood to be playing some finan- cial role that FSUOGM is unable to verify. Ash- gabat has reached out to other Middle Eastern partners, but no firm commitments have been announced. ™
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w w w . N E W S B A S E . c o m Week 49 11•December•2019