Planned and Ongoing Pipeline Projects for Caspian Oil and Gas. A Race between Europe and China?

The substantial increase of oil and gas production in the Caspian area, in particular in Azerbaijan and Turkmenistan (for gas) and in Kazakhstan (for oil) is a reliable factor for supply options in the near future. The expansion of existing pipeline systems or the implementation of new pipelines is a logical consequence from this background.

The competition for these oil and gas resources and its export routes is vehemently pushed forward by China, demonstrated for example by the “Kazakhstan – China Oil Pipeline” and the “Trans–Asia–Gas Pipeline” transporting gas from Turkmenistan via Uzbekistan and Kazakhstan to China. Both pipelines have been completed recently and now undergo substantial expansion, in the case of gas this goes beyond originally designed transport volumes.

Oil pipeline projects leading to the west – Europe and the world markets – have experienced a substantial boost during the last twelve months, such as the expansion of the Caspian Pipeline Consortium system (CPC), the Bosporus-bypass Trans-Balkan Pipeline (TBP) and the Sarmatia pipeline connecting the Black Sea with the Baltic Sea as well as the transport infrastructure for the exportation of the massive Kashagan oil volumes.

Speaking about gas transport into the western direction the two well known options known as rivalling Nabucco and South Stream have as well advanced and scored significantly. Taking into consideration the declining production rates in the North Sea, the expected commissioning of the North Stream in the near future and the quite limited increase of demand in Europe, these pipeline projects appear to enter into competition with each other.

ILF Consulting Engineers are involved in many of these pipeline projects and are well aware of the thus related strategies involving European, American, Russian, Central Asian and Chinese players in their respective roles.

To this extend, ILF has gained to achieve a comprehensive understanding of the relevant driving factors – both for transportation infrastructure development and for exportation strategies of the thus related market participants.