Acually, I had forgotten that there were several routes contemplated, some constructed or under construction:
EXPORT ISSUES
As increasing exploration and development in the Caspian Region leads to more production, the littoral states (and Uzbekistan) will have large new quantities of oil and natural gas available for export. Earning hard currency from these resources is essential to regional development plans, as well as to recouping the huge investments made by multi-national oil companies. However, for these purposes, the infrastructure left after the collapse of the Soviet Union is inadequate. Numerous new pipelines and pipeline expansions in each of the cardinal directions have been proposed, and some have been constructed.
West
Changing the region's energy flow to an East-West axis towards Europe, from the existing North-South axis towards Russia (which will effectively minimize dependence on Russia), is integral to the development goals of these newly independent states. The region's three biggest pipeline projects, the Caspian Pipeline Consortium Project (CPC), the Baku-Tiblisi-Ceyhan oil pipeline (BTC), and the South Caucasus natural gas pipeline (a.k.a.Baku-Tiblisi-Erzurum --BTE ) are establishing the framework for this new axis.
The Caspian Pipeline Consortium project connects Kazakhstan's Caspian Sea area oil deposits with Russia's Black Sea port of Novorossiysk (see map). Oil loaded at the port of Novorossiysk is then taken by tanker to world markets. Although the pipeline transverses Russia and was developed in conjunction with the Russian government, development of the CPC has, for the first time, given the Caspian Sea region a viable alternative to the Russian dominated northern export routes (namely Atyrau-Samara, see below). The pipeline's first crude oil was loaded at Novorossiysk on October 15, 2001, and the pipeline was officially opened on November 27, 2001. Most of the oil routed through CPC comes from Kazakhstan's Tengiz field, however, several other Kazakhstani fields are developing spur connections to the pipeline. Accordingly, these new connections are expected to increase throughput from 260,000 bbl/d, in 2002, to between 350,000 and 415,000 bbl/d by the end of 2003. Current capacity of the CPC pipeline is 560,000 bbl/d, with plans to increase capacity to 1.34 million bbl/d.
However, additional Caspian oil exports through the CPC pipeline will increase congestion in Turkey's Bosporus Straits, which connect the Black Sea to the Mediterranean. Turkey has raised concerns about the ability of the Bosporus Straits, already a major chokepoint for oil tankers, to handle the additional tanker traffic, given that most of Russia's existing oil export pipelines also terminate at Novorossiysk. Turkey has stated its environmental concerns about a possible collision (and ensuing oil spill) in the Straits as a result of increased tanker traffic from the launch of the CPC's pipeline. As a result, there are a number of options under consideration for oil transiting the Black Sea to bypass the Bosporus Straits. (For more information, see: Caspian Sea Region: Bosporous/Black Sea Issues)
Another westward pipeline, Baku-Tbilisi-Ceyhan, will export Azeri (and quite possibly Kazakhstani) oil along a 1,040-mile route from Baku, Azerbaijan via Georgia to the Turkish Mediterranean port of Ceyhan, allowing oil to bypass the Bosporus Straits (see map). Construction of the 1-million-bbl/d pipeline, which is estimated to cost $2.9 billion, is scheduled to be completed in 2004, with oil to begin flowing in 2005.
The BTC project has faced numerous challenges in its development. After allaying initial fears that the pipeline was technically infeasible given its considerable distance through rugged terrain, the projects developers now face criticism from local and international non-governmental organizations which consider the project to be environmentally hazardous, threatening to regional archeological treasures, and in violation of international human rights. Critics of the pipeline have taken theses grievances to the major international financial institutions involved in the project, the World Bank and the European Bank for Reconstruction and Development (EBRD), and have asked that they withdraw their support. According to statements from BTC Co., the pipeline's developer's, plans are still on schedule for completion in fourth quarter of 2004.
A third natural gas pipeline, known as the "South Caucasus Pipeline," a.k.a "Baku-Tbilisi-Erzurum", or "BTE", will run parallel to the Baku-Tbilisi-Ceyhan oil pipeline for most of its route before connecting to the Turkish infrastructure near the town of Erzurum. The South Caucasus pipeline is designed to carry natural gas from Azerbaijan's Shah Deniz field, and have a capacity of 258 Bcf per year. The project is scheduled to be completed in time for the Shah Deniz project's first contracted exports to Turkey in 2006.
East
However, there is some question as to whether westward to Europe is the right direction for Caspian oil and natural gas. Oil demand over the next 10 to 15 years in Europe is expected to grow by little more than 1 million bbl/d. Oil exports eastward, on the other hand, could serve Asian markets, where demand for oil is expected to grow by 10 million bbl/d over the next 10 to 15 years. In particular, Chinese oil consumption is projected to rise dramatically.
But, supplying this Asian demand would necessitate building some of the world's longest pipelines. Geographical considerations would force any pipelines to head north of the impassable mountains of Kyrgyzstan and Tajikistan across the vast, desolate Kazakh steppe, thereby adding even more length (and cost) to any eastward pipelines.
South
An additional way for Caspian region exporters to supply Asian demand would be to pipe oil and natural gas south. This would mean sending oil and natural gas through either Afghanistan or Iran. The Afghanistan option, which Turkmenistan has been promoting, would entail building pipelines across war-ravaged Afghan territory to reach markets in Pakistan and possibly India. With the ouster of the Taliban in Afghanistan in December 2001, proposals to build a Trans-Afghan natural gas pipeline and the Central Asian Oil Pipeline have re-emerged. However, in July 2003, one of the Trans-Afghan natural gas pipeline's key supporters, the Asian Development Bank, called for additional feasibility studies, thus further delaying the project.
Development of a southern pipeline through Iran would be problematic under the Iran and Libya Sanctions Act, which imposes sanctions on non-U.S. companies investing in the Iranian oil and natural gas sectors. U.S. companies already are prohibited from conducting business with Iran under U.S law. In 1997, however, Turkmenistan and Iran completed the $190 million Korpezhe-Kurt Kui pipeline linking the two countries, thereby becoming the first (and so far, only) natural gas export pipeline from Central Asia to bypass Russia. Turkmenistan and Kazakhstan have initiated low-volume oil "swap" deals with Iran, delivering oil in tankers to refineries in Iran's northern regions in exchange for similar volumes of crude at Iranian ports in the Persian Gulf. Iran has recently undertaken efforts to upgrade its domestic distribution network to allow for swap capacity to increase from roughly 50,000 bbl/d to 150,000 bbl/d by the end of August 2003.
North or Northwest
For its part, Russia has proposed multiple pipeline routes that utilize its existing and proposed infrastructure. Shortly after independence, two new northwesterly pipelines were constructed known as the "Northern" and "Western" Early Oil Pipelines, which extend from Baku to Novorossiysk (Russia), and Baku to Supsa (Georgia), respectively, and have a combined capacity of roughly 215,000 bbl/d (see map). Also, an existing northbound pipeline from Atyrau in Kazakhstan to Samara in Russia has been upgraded, but is expected to become relatively less significant as throughput at CPC increases. However, there are political and security questions as to whether the newly independent states of the former Soviet Union should rely on Russia (or any other country) as their sole export outlet, and Caspian region producers already have expressed their desire to diversify their export options.
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