WASHINGTON – The United States will work with several new countries to help bring more natural gas to Europe by 2020,four State Department officials said Monday.
In the past,the U.S. government has not stated which countries it expects to cooperate with. But at a hearing of United States Commission on Security and Cooperation in Europe,the officials said the U.S. will work with Kazakhstan,Turkmenistan and Iraq.
The U.S. government hopes to expand the South Caucasus Gas Pipeline,which brings Azerbaijan's gas to Turkey. The three new countries form the “Southern Corridor” of suppliers and make up two emerging projects – the Turkey-Greece-Italy and Nabucco pipelines. The U.S. government believes these projects will help the economies in these countries and make them more independent,as the officials said during the hearing.
The first phase of TGI is scheduled to begin operations later this summer,when the Turkish and Greek gas grids are connected. The Nabucco project,which is intended to bring gas from the Caspian and Central Asian region to European countries,is in an earlier phase of development,the officials said in a written statement.
“In Azerbaijan,the line is functioning. But we need to make more than we are doing now in Azerbaijan. We intend to develop the Caspian pipeline. And even before this pipeline is constructed,there are options for Turkmenistan,Iraq and western Kazakhstan who are very close to the infrastructure in Azerbaijan,” said Mathew Bryza,the State Department deputy assistant secretary for European and Eurasian affairs.
Bryza is meeting this week with the Turkish energy minister to get his support for exporting natural gas from northern Iraq through Turkey. It is their second meeting on this issue.
Gregory Manuel,a special adviser to the secretary of state and international energy coordinator,said the “Southern Corridor” would help to diversify the supply of conventional fuels,which is one of the main U.S. interests in European and Eurasian regions.
Although the U.S. doesn't get any gas from that region,it is interested in the support of these projects. Steven Mann,a principal deputy assistant secretary of state for South and Central Asian Affairs,said these projects help maintain the countries' independence,which will get more than one opportunity to sell their gas. Previously,only Russia has worked with them on this issue.
The first step in U.S. influencing gas transporting policies in Eurasia was made in 2004 when the construction of the Southern Caucasus pipeline began. It is intended to support Europe with gas from the Shah Deniz region in Azerbaijan. The main stakeholders of the project are British Petroleum and Norway's Statoil,which got political support and economic guaranties from the U.S. government to build the pipeline. The first gas from the pipeline was transported this year.
Yashar Aliev,the ambassador of Azerbaijan to the U.S.,said this project with the construction of the oil pipeline Baku-Tbilisi-Jeihan helped to foster the economic growth of his country. He said with this support Azerbaijan's gross domestic product grew 34 percent over the previous year and is expected to grow 40 percent this year.
He said the projects “supported economic stability and economic independence. And these projects also support Georgia,as these two pipelines come through its territory.”
One of the main reasons for U.S. interest in these energy projects is Russia's recent actions on gas policy in that region,the State Department officials said.
The Russian company Gazprom,which is controlled by government officials and is a legal monopoly,cut off the supply of gas to Ukraine in January 2006 because of price disputes. Over the last two years,it nearly doubled gas prices for some of the Post-Soviet countries,which was perceived as a political pressure there.
Gazprom supplies about 60 percent of gas to European countries. It has long-term contracts with other European countries,including France and Germany. Gazprom gets a significant part of the gas from Central Asia. It sells it in Europe for two to three times its cost.
“The way to deal with this is not simply talking but changing it down with an increase of competition. We are trying to be active,first of all,by expanding the delivery options for gas from Central Asia and Azerbaijan,especially from there to Europe,” Bryza said.
The Russian ambassador to the U.S. was invited to the hearing,but he didn't come.