Sunday 24 / November / 2024
Ashgabat: The Russia-Ukraine war has brought a new evolution in the geopolitics of energy.
In the aftermath of the Russia-Ukraine conflict, the European Union and other western countries imposed sanctions on Russia after which, the countries are looking towards Central Asian countries as an alternative for the supply of gas.
The Repower EU initiative has three objectives with an aim at strengthening the EU's energy structure and they are--(i) increase natural gas imports from non-Russian sources, (ii) enhance the import of Liquefied Natural Gas (LNG) from non-Russian sources, and (iii) boost the development of bio-energy and promote the production of renewable energy. With the aim to achieve the third objective, which focuses on boosting the development of bio-energy and promotion of the production of renewable energy, EU countries are looking towards Central Asian countries and it seems that Turkmenistan is their primary choice for gas supply to Europe.
The gas supply for the EU from other countries (except Central Asian Countries) is unfeasible. Israel, which has gas export agreements with a number of countries, its own gas supply is fragile. Qatar, on other hand, transports only 10 to 15 per cent of LNG to Europe, according to a report in the European Times.
After all this, Turkmenistan seems the right option but China will become a major competition for Europe as the Communist country is the largest buyer of Turkmen gas accounting for over 60 per cent of pipeline imports in 2019. The payment dispute with Russia and Iran in 2016 and 2017 respectively, left China as the only major export market for Turkmenistan.
Not only this, but the Communist country is also Turkmenistan's primary international lender, having provided over USD 8 billion in loans to develop the country's gas infrastructure. Turkmenistan repays the loan with the revenue which Beijing give due to its gas deal, this enables China to have a continued influence on Turkmenistan, European Times reported.
Beijing has apparently monopolized exports of Turkmen natural gas to such an extent that gas has been used as a de-facto form of currency in economic contracts between the two countries.
In the view of the current limited gas capacity of Turkmenistan, the supply of natural gas to Europe will lead to a situation where the "fighting for gas" can be created and even the cost of China's gas imports may also go up as the Turkmen gas price will go high due to its huge demand.
Once the EU enters the Central Asian gas market, the United States may follow the same path. Therefore, the Central Asian Caspian region could face a new round of geopolitical risks, which may negatively impact China's political diplomacy, trade and economic investments, and many more.
