Page 4 - FSUOGM Week 09 2023

FSUOGM COMMENTARY FSUOGM

Russia seeks closer gas

ties with Central Asia

Russia is eager to broaden energy ties with Central Asia in light of the loss of

most of its European market share.

RUSSIA FACED with the loss of its European market might prefer to sell gas on the Turkish-Bulgarian
share, Russia is eager to carve out places for its border via its electronic sales platform, giving it
WHAT: pipeline gas exports, and one of the places that it ultimate control of its revenue, Turkey is report-
Moscow wants to form has looked is Central Asia. The region is coping edly looking to integrate its already-existing
a gas union with Central with a gas supply squeeze, but the volumes that it trade infrastructure. Turkey’s preference is that
Asia. needs are almost negligible compared with how it receives Russian gas but those molecules get
much gas Russia used to send to Europe. And mixed with Turkish domestic production, LNG
WHY: talk of a “gas union” can mostly be written off as and Azeri and Iranian pipeline gas. That is likely
Russia can supply political rhetoric – an attempt by the Kremlin to more preferable for European buyers too, that
gas to Uzbekistan and save face by demonstrating expanded ties with are reluctant to buy gas directly from Gazprom.
Kazakhstan, and use other former Soviet Union states amid Russia’s Another question is Azerbaijan. Baku com-
Turkmenistan as a route increasing international isolation. mitted last year to doubling gas exports to the
for gas to China. Kazakhstan and Uzbekistan could easily EU by 2027 to 20 bcm per year. But since that
receive more Russian natural gas to help ease announcement, no information about the source
WHAT NEXT: the shortages they have experienced this winter. of that gas has been revealed. It is possible that
The volumes of gas it can And in previous years, they did receive such gas. Azerbaijan could source more Russian gas and
transfer to Central Asia But now Moscow seems to be making this sup- pass more of its supply that it currently uses
will pale in comparison to ply contingent on support for a broader political domestically to European buyers.
the amount it used to sell project – the so-called “gas union.” On February 15, Gazprom also held discus-
to Europe. What exactly this gas union means in practice sions with Turkmenistan on “the courts and
is unclear, at least publicly. On the face of it, it prospects of cooperation in the gas sector.” Turk-
seems like a rhetorical attempt to demonstrate menistan has a plentiful supply of its own gas.
that Russia is broadening ties with the former But Russia could seek to cooperate with Turk-
Soviet space in the face of rejection by the West. menistan on delivering gas to China.
In practice, it is less clear what the Kremlin is By reversing the flow of the Central Asia-Cen-
seeking. There have been reports that Russia tre pipeline, which would have to be done any-
may be vying for greater control of Central Asian way to deliver gas to Kazakhstan and Uzbekistan,
energy systems in return for its gas. Particularly, Russia could also ship gas to Turkmenistan for
it was reported that Gazprom might have been onward delivery to the Chinese market. Doing
seeking control of the Uzbek gas transport sys- so would support the long-planned develop-
tem – a report that was quickly rebuffed by poli- ment of a fourth string along the Central Asia-
ticians both in Moscow and Tashkent. China pipeline system.
Uzbekistan’s energy minister Zhurabek Russia and Turkmenistan might also enter
Mirzamakhmudov seemed to be reacting to into joint negotiations with China on gas supply
exactly this demand in December. in order to get a better price from Beijing. But
“We are conducting negotiations based on it remains to be seen whether Ashgabat would
national interests and on the terms of trade. Any- demonstrate the necessary flexibility to forge this
way, we are not handing over our networks to partnership. ™
someone else,” the minister said. “We will never
agree to political conditions in exchange for gas.”
Russia’s talk of enhancing energy ties with
Central Asia mirrors its rhetoric in Turkey.
Russian President Vladimir Putin has talked up
prospects for establishing Turkey as a hub for
Russian gas supplies to those southeast Euro-
pean buyers that might still be willing. Russia
may well be able to expand shipments to the
Turkish market, and entice some European buy-
ers to resume purchases despite the ongoing war,
or indeed after a ceasefire or peace agreement
has been reached. But Turkey will have the upper
hand in negotiating this project. While Russia

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