Russian expert: Europe’s stake on Central Asian gas bit. We explain why this is not so.

Russian expert: Europe’s stake on Central Asian gas bit. We explain why this is not so.

Europe’s bid for Central Asia as an alternative supplier of natural gas has actually failed, said Alexey Grivach, deputy director general for gas issues at the National Energy Security Fund.

He said this on the sidelines at a conference of the Valdai Club, which this year was held in Samarkand.

“The stake on Central Asia as an alternative supplier of gas to Europe has actually failed for many reasons, including diplomatic, infrastructural, financial, and geopolitical,” he said.

Moreover, the expert believes that there is a theoretical possibility to connect the countries of Central Asia to pipelines going to Europe.

“But it is as theoretical as it was 20 years ago. There are objective reasons why this is not happening. This is the Iran factor, the Caspian factor, the transit factor, and the price factor,” said the representative of the NESF.

“Prices (on the gas market – ed.) have significantly decreased, and it is expected that they can remain at such a low level for a long time, and accordingly, the cost of gas production in Central Asia is not so small,” said Grivach.

According to him, large investments in the processing and purification of gas produced in Turkmenistan and Uzbekistan significantly increase the cost of production supplied to the European market.

Grivach said that at present the configuration of gas export from Central Asia has actually developed, where China, Russia and the countries of the region themselves are the main consumers.

“China has created a contractual base, naturally, as the main buyer. Cooperation with Russia allows us to motivate suppliers from Central Asia,” he said.

From the foregoing, it can be concluded that the expert considers the attempts to organize gas supplies from Central Asia to Europe bypassing Russia impossible, unprofitable and failed. According to him, in this case, large investments are needed to process and purify the Turkmen and Uzbek gas, which increases the cost of production. Well, if this is done through the Russian GTS, that is, under the control of Russia, then this is quite acceptable, and maybe even a profitable business.

The expert’s position is understandable and pragmatic. But the assertion that Europe’s bid for Central Asia, as an alternative supplier of natural gas, has actually failed, still contradicts the dialectic. Indeed, at the same time, he admits a theoretical possibility to connect the countries of Central Asia to pipelines going to Europe.

After all, we cant say that world history ends tomorrow, and natural gas will no longer be needed the day after tomorrow, or competition will disappear somewhere, and Europe will stop efforts to diversify its gas supply.

In general, the “battle” for the richest, most integrated and high-tech gas market in the world – the European one, is just unfolding. And who will be the winner is unclear. After all, purely commercial issues there will be resolved through the prism of politics and ideology.

And in this situation, competitors to Russian gas will be abundant even without Central Asian gas. Therefore, it is now impossible to predict what the situation will be in the EU gas market in January next year. Not to mention the distant future.

And of course, the supply of Azerbaijani gas to Europe, which should begin in 2020, will be important. How will the European market react to the supply of the Caspian gas?

And here it’s not even a matter of quantitative characteristics of Azerbaijani deliveries to the EU market, but that it will be the first, real diversification of pipeline gas supplies to Europe. Such examples are contagious to everyone. Both for suppliers and consumers. As they say, the start the most difficult.

Nury AMANOV