China, the world’s largest energy consumer, has started receiving natural gas transported through the newly constructed Line C of the crucial China-Central Asia gas pipeline network on Sunday, state media reported.
Gas transported through Line C, which is now operational, successfully reached the Horgos Port in China’s Xinjiang province on Sunday.
Line C is over 1,800 kilometers long and runs parallel to lines A and B, with the pipeline network showing Beijing’s growing clout in Central Asia as it seeks resources for the Chinese economy.
China imports about 20 bcm of gas from Turkmenistan, about half of its total gas imports, and the two countries signed an agreement last year to ramp up gas exports to 65 bcm by 2020.
Central Asia is seeking new export routes for the fuel as transport routes to Europe via Russia are now in question following the EU sanctions on Moscow over Ukraine.
China’s first large international pipeline for imported natural gas, the China-Central Asia line starts at the Turkmenistan-Uzbekistan border before passing through central Uzbekistan and southern Kazakhstan before entering China.
From Horgos in Xinjiang, the pipeline then connects with China’s West-East pipelines, to deliver natural gas across the country.
Trade between China and Central Asia has increased from about $500 million in 1992 to $26 billion in 2009, according to official Chinese figures.
The Central Asia-China gas pipeline runs all the way from China’s east coast cities to Galkynysh field, a distance of 6000 miles as it sources energy from major energy producers Turkmenistan, Kazakhstan and Uzbekistan.
China’s energy giant CNPC also plans to integrate Afghanistan into this energy network.
TBP and Agencies
Iran has officially inaugurated a railroad which connects the northern Iranian city of Gorgan to Incheh Borun town along the border with Turkmenistan.
The Gorgan-Incheh Borun railroad came on stream in a ceremony attended by Iranian President Mahmoud Ahmadinejad and Roads and Urban Development Minister Ali Nikzad in Golestan Province on Monday.
The 80-kilometer long rail project, which is part of a broader railroad network, links Iran to Central Asia, Russia and China and has the capacity to annually transfer 10 million tons of goods and more than 4 million passengers.
The initial agreement on the construction of the railroad was signed between the presidents of Turkmenistan and Kazakhstan in the city of Turkmenbashi in April 2007 and Iran joined the deal in September 2007.
The 920-kilometer railroad will shorten more than 600 kilometers of the route for transporting goods from the Central Asia to the Persian Gulf, and will become one of the important international transportation links between China and Europe.
Earlier on Sunday, Nikzad said projects are underway to connect Iran’s railway system to the international network via five points.
The Iranian minister said the five projects include linking Sarakhs in the northeast of the country to Azerbaijan Republic, Khosravy in the west of Iran’s Kermanshah Province to Iraq, southern border town of Shalamche to Iraq, southeastern port city of Chabahar to the Sea of Oman as well as the one which will link Iran to Turkmenistan, Kazakhstan and China.
- Caspian Rail Corridor to link Russia to India (rbth.asia)
Turkmenistan is persevering with efforts to persuade an international oil major to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, according to reports in India, despite being unwilling to give up a stake in its gas fields to potential investors.
A series of road shows in New York, London and Singapore in the autumn, aimed at attracting international oil and gas companies to the project, ended in failure, even though companies including Chevron, Exxon Mobil, BP, BG Group, RWE and Petronas attended. That disappointment flew in the face of claims from Turkmen officials that they had all expressed an interest in the project, which carry gas from the secretive Central Asian state via Afghanistan to the Indian sub-continent.
Ashgabat’s refusal to allow participating companies to take a stake in the Turkmen hydrocarbons fields that would fill the pipeline has been cited as the main reason for the flop, although the continuing instability in Afghanistan is another factor.
India’s Economic Times cites an unnamed Indian government official as saying that, as the four participating countries prepare for a meeting on May 15, Turkmen officials continue trying to persuade an unnamed international oil major to take part. “Our understanding is that [Turkmenistan is] quietly working with international oil companies to work a way around the question of upstream stake,” the official said.
However, he also noted that the ban on sales of stakes in Turkmen fields to foreign buyers remains a sticking point. “They have told us that they have passed a law after the Chinese were given a stake and this now does not allow them to give a stake to anybody else in the gas fields,” the official said. It’s unclear to which deal he was exactly referring.
Ashgabat is secretive over its agreements in the oil and gas sector. In 2007, China’s CNPC was given the right to develop the Bagtyyarlyk gas field, which supplies the Central Asia-China (CAC) gas pipeline exporting to China. However, the level of access Bejing enjoys to the Galkynysh (previously South Yolotan) gas field remains unknown after the Chinese State Development Bank pledged $4.1bn to help develop it in 2010. On the one hand, it’s thought Turkmenistan may have signed over a stake. Other speculation suggests Ashgabat has offered no more than a firm commitment that CAC is filled.
Either way, India is clearly pushing for a similar level of security. It has been pushing for an equity stake in the massive Galkynysh for itself, to ensure supply issues do not compromise the massive financial commitment needed to build TAPI. Indian officials say that since CNPC has been given access to upstream assets in Turkmenistan, India’s state owned GAIL should have the same privilege.
At the same time, the four states participating in TAPI have maintain that they aim to start construction of the pipeline, which has support from the Asian Development Bank, by the end of 2013. However, on top of the jockeying between themselves, they are trying to drum up support from international oil companies to invest in the project, which may cost as much as $12bn.
Agreements on the price of gas exports to Afghanistan, India and Pakistan have already been signed. In September, the four participating governments agreed to proposal from Turkmenistan to set up a company with shared capital of $20m to carry out a feasibility study and design the pipeline.
There is a high probability that US sanctions against Iran have been violated by its own army. Part of the $1.55 billion in fuel the US bought from Turkmenistan for the Afghan army in the last five years may have originated in Iran.
A report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) suggested that “despite actions taken by DOD to prevent the purchase of Iranian fuel with US funds, risks remain that US economic sanctions could [have been] violated” from 2007 to 2012.
Most of the fuel for domestic Afghan consumption comes from neighboring Iran. Because of the US sanctions on Tehran restricting the trade of Iranian oil and petroleum products, the ISAF has been required to abide by the regulations and buy petrol from eight Afghan-owned companies that deliver petroleum from Turkmenistan, which borders both Iran and Afghanistan.
The SIGAR report also acknowledged there are no plausible oversight mechanisms to make sure Iranian petroleum products are not included in future fuel purchases.
Turkmenistan is a major regional oil producer, which also trades for petroleum products made in Kazakhstan, Uzbekistan, Russia and Iran. Petrol vendors in Turkmenistan use flexible supply schemes, meaning that fuel of various origins could potentially be blended together.
In response to a draft of SIGAR report, the US Embassy in Kabul stated that “it is possible that if blending is taking place in Turkmenistan it could contain some Iranian fuel,” but refused to admit that fuel imported from Russia could also be blended with Iranian fuel prior to its import into Afghanistan.
“All fuel imports carry a ‘verified Fuel Passport’ from the refinery, which provides information on the origin, quantity, quality, and specifications of the fuel,” the embassy explained.
“Suppliers are unlikely to blend Iranian fuel, or any other product, with other sourced fuel because of the potential that blending could cause product deviation from specification standards and potentially cause a rejection of the entire shipment,” the embassy said.
In 2012, the Pentagon reportedly spent over $800 million on imports from Turkmenistan, most likely for fuel purchases.
Iran has officially begun pumping crude from an oil field it shares with it western neighbor Iraq, the managing director of the Iranian Central Oil Fields Company (ICOFC) says.
Speaking in a press conference on Tuesday, Mehdi Fakour said development and crude oil production from the Aban oil field has started.
Iran shares oil and gas fields with most of its neighbors, including Iraq, Kuwait, Qatar as well as Oman and Turkmenistan.
The official noted that Iran has not lagged behind its neighboring countries in developing the fields it shares, adding, “Currently, ten drilling rigs are operating simultaneously in the country’s joint oil fields.”
Fakour also stated that since the beginning of the current Iranian calendar year [March 20, 2012], USD1.2 billion of funds have been supplied by companies other than the National Iranian Oil Company (NIOC) for investment in Iran’s oil and gas projects.
Iran holds the world’s third-largest proven oil reserves and the second-largest natural gas reserves.
The country’s total in-place oil reserves have been estimated at more than 560 billion barrels, with about 140 billion barrels of extractable oil. Moreover, heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.
Iranian energy officials said in July 2011 that as much as 35 percent of the country’s energy development budget would go towards the development of the shared oil fields.
TEHRAN – Iranian Minister of Road and Urbanization Ali Nikzad said Ashgabat’s recent decision to annul a contract with an Iranian company over the construction of a key railway linking Iran to the Central Asia does not mean an end to the project and Tehran will accomplish construction of the railway which is a vital North-South corridor.
“The termination of Turkmenistan’s contract with an Iranian company will not affect the two country’s joint railway construction project,” Nikzad told FNA on Monday.
“This railway line will be inaugurated in due time,” the Iranian minister reiterated.
Meantime, he said Turkmenistan might have annulled the contract with the Iranian company in a bid to strike a better deal with the same or a different contractor.
Yet, the Iranian minister underscored that Iran will accomplish its undertakings with regard to this project.
Earlier media reports said that Turkmenistan has annulled a $700 million contract for an Iranian company to build a key section of the key railway line.
The decision was made at a cabinet meeting chaired by President Gurbanguly Berdimuhammadov.
During the cabinet meeting, the Turkmen president said Turkmenistan will build this section independently.
Yesterday, Iran started laying the rail line of a key transit and transportation project linking Iran’s Northern city of Gorgan to IncheBoron in Turkmenistan.
Speaking to FNA, Iranian Deputy Minister of Road and Urbanization Seyed Ahmad Sadeqi said that the last phase of the construction of the railway officially started in a ceremony with President Mahmoud Ahmadinejad in attendance.
He said that construction of the infrastructures of the 80km long railway has already been finished.
The railway will link Iran to Turkmenistan and then to Uzbekistan and Kazakhstan and will connect the CIS countries with the Indian Ocean and high seas and the Persian Gulf littoral states.
The primary agreement on the construction of the rail link among Iran, Turkmenistan and Kazakhstan was signed between presidents of Turkmenistan and Kazakhstan in April 2007 in the city of Turkmenbashi and its final agreement was signed in a summit meeting in Tehran in September of the same year by the three presidents.
The total route of the railway is 1000 kilometers, of which 90 kilometers would be in Iran, 700 kilometers in Turkmenistan and 210 kilometers in Kazakhstan.
The railway facilitates transportation of goods from the Central Asian countries to the Persian Gulf.
- Turkmenistan: Ashgabat Stops Iranian Railroad Project In Its Tracks (eurasiareview.com)
- Iran And Turkmenistan Ready To Develop Trade (rferl.org)
- Iran welcomes Tajik proposal for railroad link to China (alethonews.wordpress.com)
Iran’s Minister of Road and Urban Development Ali Nikzad says Tehran welcomes a proposal by the Tajik government to connect the Iranian rail network to the city of Kashgar in China via Tajikistan and Afghanistan.
In a meeting with the visiting Tajik Minister of Transportation and Communications Nizam Hakim Oaf on Sunday, Nikzad said the 392 kilometers (km) long rail corridor will connect Iran, Afghanistan, Tajikistan, Kyrgyzstan and China.
“It will increase trade exchange and export volume, reduce transit costs among these countries and facilitate the transport of cargo and passengers in the region,” he added.
The Iranian minister also pointed to the 15,000 km railroad tracks in Iran, saying the country’s railroads are currently connected to Turkmenistan through Gorgan city, to Iraq via Shalamcheh border crossing, to Azerbaijan through Astara port city, and also to Afghanistan through Khaf-Herat railroad.
The Tajik minister, for his part, said the most complicated part of the project is a 270 km-long section that includes 16 km of tunnels and 47 bridges, and needs about USD 8-10 million for every kilometer of the line.
He added that the first phase of the project is 335.4 km and will cost USD 169.5 million while the second phase needs USD 96.4 million in investment. The final stage, Hakim Oaf said, which includes building anti-avalanche structures, will cost USD 30 million.
The Tajik minister of transportation and communications is currently in Iran to take part in a two-day international conference dubbed “South Khorasan, Transit and Development of East Axis.” The event will open in Iran’s eastern city of Birjand on Monday, April 7, attended by participants from 18 countries.
- Iran, Tajikistan trade turnover exceeded $500 million: envoy – Tehran Times (tajikistanfocus.wordpress.com)
The United States strongly supports the idea of construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. At the same time, Washington strongly opposes meeting of Pakistan’s needs in energy resources by constructing pipeline to purchase “blue fuel” from Iran, ITAR-TASS quotes U.S. Secretary of State Hillary Clinton as saying on Wednesday.
Speaking at hearings in one of the subcommittees of Appropriations Committee of the U.S. House of Representatives, she assured that Obama administration recognizes Islamabad’s “essential energy needs”. However, construction of a gas pipeline from Iran to Pakistan, either as a separate project of Tehran, or as a joint venture of the two sides would mean a “violation of our (that is, the U.S.) legislation on sanctions” against the Islamic Republic, Clinton said.
“We all know what would be the consequences of this. And it would have particularly devastating effect on Pakistan, because its economy is already fragile. Additional pressure to which the United States would have been forced to resort, would undermine their (that is Pakistanis) economic situation even more,” Clinton added.
She said the U.S. “clearly” stated its position on this issue to Pakistan. “We urge Pakistan to seek alternatives (to purchasing natural gas from Iran),” Clinton added.
From her point of view, it is “a little inexplicable” why Pakistan now “tries to negotiate (with Iran) on the construction of the pipeline,” knowing that Washington is trying hard to “increase pressure” on Tehran in connection with its refusal to clarify nature of nuclear activities. “And there is an alternative, which we strongly support – Turkmenistan-Afghanistan-Pakistan-India the gas pipeline. We believe that this is a better alternative in terms of both predictability and avoid doing business with Iran,” U.S. Secretary of State said.
- US lobbies Pakistan to drop Iran-Pakistan gas pipeline project (alethonews.wordpress.com)
- US threatens Pakistan with sanctions over Iran gasline (nation.com.pk)