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caspian weekly roundup

Caspian Weekly Roundup

Author:Caspian Policy Center

Aug 14, 2018

Energy

Five Caspian States Sign Agreement on Legal Status of Caspian Sea Leaders from the five Caspian littoral states- Russia, Kazakhstan, Iran, Azerbaijan, and Turkmenistan- gathered in Aktau, Kazakhstan on August 12 to sign an agreement on the legal status of the Caspian Sea. The summit was the fifth such meeting between these countries’ respective heads of state, but the first at which a substantive agreement was signed. The states agreed to fifteen miles of sovereign waters, with an additional ten miles of fishing territory. The waters beyond the fishing zones will be common waters. Kazakh President Nursultan Nazarbaev noted the framework allows the construction of underwater pipelines across the Caspian Sea upon the consent of the affected neighboring states, rather than all five Caspian states. This provision removes a legal barrier to a proposed trans-Caspian pipeline from Turkmenistan to Europe. A trans-Caspian pipeline would expand Turkmenistan’s gas export market while contributing to Europe’s energy diversification efforts. However, previous opposition from Russia on environmental grounds prevented any progress of the idea. Iran was the most reluctant to praise the agreement, indicating that further talks would be needed to solidify state baselines and the division of the resource-rich seabed. Iran has long been a proponent of equally dividing the Caspian’s resources, instead of delimiting the sea based on coastal territory lines. Facing pressure from newly-reinstated U.S. sanctions, Iran signed the agreement despite being at odds with that key provision. Iran was, however, supportive of Article 14, which forbids any non-littoral state from having a military presence on the sea. They further added that the ban should be extended to shipping foreign militaries’ cargo across the sea, an allusion to Azerbaijan and Kazakhstan’s arrangement to ship U.S. military cargo from Baku to Aktau on its way to Afghanistan. Russia has, by far, the largest military presence on the Caspian, but Iran has been taking steps in recent years to project more seapower in the region. Sixth Caspian Summit to be Held in Turkmenistan The five Caspian states agreed to further talks at a sixth Caspian summit in Turkmenistan according to the final communique of the fifth Caspian summit held in Aktau on August 12, the Ministry of Foreign Affairs of Kazakhstan said in a statement. Additionally, it was proposed that the first Caspian economic forum be held in 2019 in Turkmenistan. The forum would bring together entrepreneurs and businesses from the five Caspian states to discuss trade and economic cooperation. China Exploring Possibility of Connecting to TAPI Gas Pipeline Project China is exploring building a spur from Pakistan’s territory once the multi-country TAPI natural gas pipeline project begins operating, a Pakistani official said, with the financial close of the project’s first phase expected next month. Turkmenistan is building the TAPI pipeline to diversify its gas exports, which have mostly gone to China. But the project has suffered delays due to difficulties obtaining financing and the security risks of building a pipeline through war-torn Afghanistan. Chinese officials have shown interest in building a spur from Pakistan and the line could act as an alternative to Beijing’s plans to build a fourth China-to-Turkmenistan pipeline. It would be cheaper and easier for China to build a line from Pakistan’s territory to cross the Karakoram range to its western border. Romania Reveals Possible Financing Sources for AGRI Project Azerbaijan-Georgia-Romania Interconnector (AGRI) remains an important project for Romania and for the European Union (EU), a source in Romanian government told Trend. The source pointed out that AGRI aims at opening a new gas transport corridor from the Caspian region, especially from Azerbaijan, as a new entry point for imported gas to the EU market. "The corridor was specially designed as the shortest, most direct and independent gas transport route connecting the gas source to the EU gas market. The discovery in the Black Sea of important hydrocarbon reserves may confer an additional significance to the project. Furthermore, AGRI may be considered as an additional supply route for the BRUA (Bulgaria-Romania-Hungary-Austria) interconnector currently under execution."

Security

Turkmenistan, Kazakhstan Advance Strategic Partnership The exchange of ratification documents of the Strategic Partnership Agreement between Turkmenistan and Kazakhstan, signed on April 18, 2017, took place in Aktau, the Turkmen Foreign Ministry said in a statement Aug. 13. The above-mentioned agreement establishes the relations of strategic partnership between the two countries on the basis of equality, mutual trust and comprehensive cooperation, and also brings the bilateral relations to a qualitatively new level, corresponding to the potential and actual needs of the Turkmen-Kazakhstan cooperation, the message says. The document will enter into force on September 11, 2018. Kazakhstan and Russia to Develop Super Heavy-Lift Rocket Kazakhstan will assist Russia in developing a super-heavy-lift launch vehicle (SHLLV) as part of ongoing cooperation at the Baikonur space complex. Russian company Rocket and Space Corporation (RSC) Energia will develop the complex, which is scheduled to be transferred to Kazakh ownership in September or October and redesigned as a Soyuz-5 launch complex. Kazakhstan plans to invest $314 million in the project. Renovations on the complex will start in 2019, and the first rocket launch is scheduled for 2028.

Economy

Tashkent to Host Uzbek-Chinese Business Forum Tashkent will host the Uzbek-Chinese business forum with participation of representatives of the textile enterprises of the Uztekstilprom Association, said a message posted on the Association's website. The event will be held August 15 as part of the visit of a delegation of China National Textile and Apparel Council. The Chinese delegation arrived in Tashkent on August 10. The delegation includes the heads of 33 Chinese associations and major textile companies. The event will be attended by the heads of the ministries of economy, foreign trade, the State Tax Committee of Uzbekistan, as well as representatives of departments, companies, and concerns of Uzbekistan and China. The U.S. – Azerbaijan Trade Increased by 34 Percent Bilateral trade between Azerbaijan and the United States increased by 34 percent surpassing 507 million dollars in the first six months of 2018. First 6 months’ trade is almost equal to the last year’s total 12 months’ trade. With almost 50 billion USD GDP Azerbaijan is the largest trade partner of the US in the South Caucasus region. Last year the U.S. had 142 million dollar surplus in its trade with Azerbaijan. Turkmenistan, Japan Bank for International Cooperation Mull Prospects of Co-Op The Foreign Ministry of Turkmenistan held a meeting with a delegation from the Japan Bank for International Cooperation (JBIC) led by the senior adviser of Credit Department Kenji Hosono, said a message from the Turkmen Foreign Ministry. The parties noted the productive nature of the cooperation established between Turkmenistan and the largest Japanese companies. It was also noted at the meeting that the promising areas for partnership are oil and gas and chemical sectors, electricity, industry, and transport spheres. The representatives of the Japanese bank expressed interest in the intensification of relations and expressed their readiness to take an active part in the implementation of large-scale projects in Turkmenistan, the message says. Kazakhstan’s Kostanay Region Eyes to Increase Export Volume of Processed Products The task has been set to achieve an increase in the volume of export of processed products by 2.5 times within the program of development of the agro-industrial complex of Kazakhstan’s Kostanay region, said a message posted on the website of Kazakhstan’s Ministry of Agriculture. This statement was made during the meeting between Kazakhstan’s Deputy Prime Minister, Agriculture Minister Umirzak Shukeyev and producers of agricultural products of the Kostanay region. During the meeting, the prospects of a regional program for the development of the agro-industrial complex, as well as the implementation of investment and scientific projects, were thoroughly discussed. Proposal to Create a Transport and Logistics Center in the Caspian Sea Announced The president of Turkmenistan, Gurbanguly Berdimukhamedov, proposed to create a transport and logistics center in the Caspian Sea at the fifth Caspian summit in Aktau.  The center’s executive apparatus would rotate between the coastal cities of Russia, Kazakhstan, Azerbaijan, Iran, and Turkmenistan. The center would strengthen partnerships between the Caspian states in the realm of transportation, according to the President Berdimukhamedov. (Sources: The Astana Times, AzerNews, Deutsche Welle, Reuters, TASS, The Times of India, trend.az, and Риа Новости.)

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