29the national bureau ofasian researchnbr special report #23 | september 2010Central Asia’s Pipelines: Field of Dreams and RealityEdward C. Chow and Leigh E. HendrixEDWARD C. CHOWis a Senior Fellow in the Energy and National Security Program at the Center for Strategic and International Studies (CSIS). He can be reached at <[email protected]>. LEIGH E. HENDRIXis a Research Associate with the CSIS Energy and National Security Program. She can be reached at <[email protected]>.
31CENTRAL ASIA’S PIPELINES uCHOW & HENDRIXOn December 14, 2009, President Gurbanguly Berdimuhamedov of Turkmenistan hosted China’s president Hu Jintao, Kazakhstan’s president Nursultan Nazarbaev, and Uzbekistan’s president Islam Karimov at a remote natural gas field in the eastern part of Turkmenistan for the inauguration of an 1,800-kilometer pipeline that connects all four countries and will transport 40 billion cubic meters (bcm) of gas annually when it reaches its ultimate capacity.1The ceremony marked yet another turning point in the two-decade saga of bringing Central Asian oil and gas to international markets after the collapse of the Soviet Union—a saga marked by a few successes and more failures.Like the old Silk Road, this story has many twists and turns and culminates in multiple routes rather than a single direction. Unlike in the time of the Silk Road, Central Asian and Caspian countries are main actors in this modern journey and not just a crossroad. Many lessons can be drawn from the experience of the past twenty years to plot a future path. This essay will attempt to explore this landscape.Russian DominationThe period immediately after the collapse of the Soviet Union was characterized by the overwhelming advantages former colonial powerRussia held in transiting Central Asian oil and gas—advantages that were largely squandered in the 1990s. All the transportation and other logistical infrastructure of Central Asia was directed toward European Russia as part of the Soviet legacy. With respect to oil and gas infrastructure, pipelines crucially ran to Russia. Likewise, communications, railroads, river, and air transport were linked with Russia and nowhere else.Central Asia was not only land-locked, it was completely isolated even from its immediate neighbors outside former Soviet space. Refineries in eastern Kazakhstan ran West Siberian crude oil, crude oil production from western Kazakhstan was shipped to Samara in the Russian Federation, and Azerbaijan received crude oil and natural gas from Russia. The Soviet Union was also a union of oil and gas.Even as countries in the Caspian sought to strengthen their newfound political and economic independence by inviting Western oil companies to rapidly develop the region’s oil and gas potential, these same major oil companies saw using the old Soviet pipeline system as the easiest way to evacuate their initially low volumes in order to defer capital expenditure on new transportation infrastructure.