Iran-Europe Dialogue on Central Asia and Caucasia (CA&A) Abbas Maleki Roundtable on “Iran and...
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Transcript of Iran-Europe Dialogue on Central Asia and Caucasia (CA&A) Abbas Maleki Roundtable on “Iran and...
Iran-Europe Dialogue on Central Asia and Caucasia
(CA&A)
Abbas Maleki Roundtable on “Iran and European Union Cooperation in Caspian Sea, Central Asia, and CaucasusInstitute for Caspian StudiesMarch 11, 2007
Sources of Instability
-Radical approaches to Islam-The lack of sustainable economic development-Energy and its Route-Effort to change the lifestyle of the peoples in
the region-Corruption-Policies of dominated powers in the region-Ethnic violence -Drug Trafficking
Radical approaches to Islam
Different interpretation of Islam in the CA&C is one of instability sources. Specifically, the extreme perceptions of Islamic culture as different groups like Hizbuttahrir are proposing.
A rigid, radical and unpopular version of Islam which is very hard for the people to obey it.
Lack of sustainable developmentTotal population of the CA&C is 73 millions: -68% of 8 million in Azerbaijan, under the poverty line -35% 15 Kazakhstan -51% 5 Kirgizstan -GDP/Capita: -Tajikistan $180 -Kirgizstan 270 -Uzbekistan 360 -Armenia 520 -Azerbaijan 600 -Georgia 630 -Turkmenistan 750 -Kazakhstan 1260
Energy export is not very high Armenia 0.3 US billion Dollars Georgia 0.3 Kyrgyzstan 0.5 Tajikistan 0.8 Azerbaijan 1.8 Turkmenistan 2.7 Uzbekistan 3.0 Kazakhstan 9.1 Compare with Saudi $135 and Iran $55 US billion
Orchestrated efforts by West to change the lifestyle of the peoples in CA&C
Activities of rulers to weakening traditions, customs
Neglected NGOs Example: Kazakhstan advertisement in IHT, Nov. 12, 2003
title: "Kz is the outpost of struggle against fundamentalism". Kz is the only country in the region in which Islamic opposition does not really exist. Religion has never played an important role in Kz, while Muslim organizations have been influential in neighboring Uz and Td…..This means that the Kazakhs are catching on to Western lifestyle and values.
The question is who is living with Kazakh lifestyle and values in future?
Corruption
There is no good governance in the region-Most of the Governments are totalitarian
regimes-Most of the rulers are the former Secretary
General of local Communist Parties.-Corruption Index shows -Azerbaijan is the 4th most corrupted country -Russia is the 7th
-Kazakhstan is the 20th
Energy in CA&C
Energy is one of the resources that could support the development
But the geopolitics of pipelines is the key factor for the phenomenon of new dependency to other countries
Russia is trying to dominate all of energy infrastructure in Eurasia
Energy Routes at a Glance
Middle East Sub Region
Asian Identity
ECO (Economic Cooperation Organization)
Iran and CA&C Iran has shown a rational, modest and economic
oriented model in the CA&C. Iran’s activities for -Establishing ceasefire in Nagorno Karabakh in
1994. -Success to end the Tajik civil war is among them. -Iran was eager to see more cooperation among
CA&C, proposed them the membership of ECO, establishment of CASCO in 1992.
-An observer in Shanghai Cooperation Organization -Road and Rail networks for landlocked countries
Iran:A look at the energy sector
Iran has very ambitious plans in oil, gas and petrochemicals;
Though the strategy on oil production capacity increase remains a key debate topic, major investments in this sector are inevitable;
The legal framework remains an issue, though slow changes are taking shape;
Iran’s focus in the next decade will be on gas and also gas-intensive industries;
Next important event: Restructuring of NIOC and consequent corporatization of the energy sector companies.
Sector Investment Volume (in $ billion)
Oil 40
Gas 45
Petrochemicals 25
Power Generation 20
Investments needed in Iran’s energy sector 2005-2020
KTI
Odessa
Novorossiysk Makhachkala
Atyrau
Actual
Baku
Neka
1
Samara
2
3
4
Ceyhan
Supsa
5
1.1
2.1
1.2
2.2
2.3
Omsk
Pavlodar
Shymkent
Chardzhou
1 – Atyrau-Samara1.1 – BPS1.2 – Druzhba-Adria
2 – CPC2.1 – Odessa-Brody-Gdansk2.2 – Constanta-Trieste2.3 – Burgas-Alexandroupolis
3 – Aktau-Baku-Tbilisi-Ceyhan4 – Kazakhstan-China5 – Kazakhstan-Turkmenistan-Iran
Kazakhstan-Turkmenistan-Iran Pipeline
• Study in process in accordance with the Agreement on Joint Studies concluded between KazMunayGas, Total, Japan National Oil Corporation, and Inpex
• A Long-Term Export Option for Delivering Kazakh Oil to Asian Markets via Persian Gulf
Caspian Oil Terminals and Neka
Neka-Ray Old and New Pipeline (370 000 b/d)
Iran’s Free Zones in the North
North-South Corridor
Great Central Asia Routes
11%
13.6%
20%
Iran-Europe Energy Dialogue
The gas pipeline from CA to Iran then Europe is a key project in trilateral cooperation among three regions.
The study of the two routes from Iran to Europe via Turkey and Ukraine had been done.
Energy
Iran is energy giant, one of its feet on the Persian Gulf, another on the Caspian, with geostrategic advantages.
Europe is surrounded by the sea of gas, most important of them: Russia, Iran and Qatar.
For Europe, the importance of CA&C is dramatically increased, because member ship of each central or Eastern Europe countries to EU means a new demand for Energy.
Energy (2)
-Iran can decrease isolation of central Asia dramatically.
Iran now imports gas from Turkmenistan to consume in the Northern part of Iran, as imports oil from Kazakhstan.
Iran is end-user of the produced oil and gas in the CA&C
Potential New Supplies to Europe with Diversification of Supply
Caspian Sea region: Azerbaijan, Turkmenistan, Kazakhstan, Uzbekistan
Middle East region: Iran, Iraq North Africa region: Egypt, Libya
Iran-Europe Energy Dialogue Restraints
Freidman Muller has discussed, in the past with political motivation, Europe preferred to follow the Soviet gas pipeline instead of the cheap and costless Iranian gas. Now again, because of US extraterritorial rules like 1995 ILSA, the oil and gas companies can not invest more than 20 million dollars in Iran's energy industries.
World NG Consumption
EU NATURAL GAS DEMAND & SUPPLY OUTLOOK 2003 - 2025
Source: EUROGAS Report 2004
0
100
200
300
400
500
600
2003 2010 2015 2020 2025
( b
illi
on
Nm
3 )
Indigenous production Contracted imports Additional supplies Demand
6
Proved natural gas reserves at end 2006
Sources of Natural Gas Supply - European Union
Source: Eurogas
2030Indigenous Imports 80% Production 20 %
2003Indigenous Net Imports 51% Production 49 %
2002Indigenous Net Imports 47% Production 53 %
Import Norway
Import Russia
Import Algeria
Import Others
Indigenous Production
Indigenous Production
Imports
Source: EU-forecast, EU Energy, Issue 86, July 2nd, 2004
14%
19%
12%
49%
6%
80%
20%
14%
18%
12%
53%
3%
Forecast of Gas Supply – OECD Europe
OECD European gas balance, 1990 - 2030
0
200
400
600
800
1.000
1990 2000 2010 2020 2030
bcm
y
Indigenous production Africa Transition economies
Middle East Other
Source: „Security of Gas Supply in Open Markets - LNG and power at a turning point“, Edition 2004 (OECD/IEA)
Nabucco
New gas supply route to Europe from
Turkey to Austria
via Bulgaria, Romania and Hungary
Project Partners
– OMV • OMV Gas GmbH, Austria
– MOL• MOL Natural Gas Transmission Ltd., Hungary
– Transgaz• S.N.T.G.N. Transgaz S.A., Romania
– Bulgargaz• Bulgargaz EAD, Bulgaria
– BOTAS• Botas Petroleum Pipeline Corporation, Turkey
Nabucco corporate structure
NabuccoInternational
Company
Nabucco InternationalFINCO
OGG MOL TG BG Botas NN
NabuccoAustria
NabuccoHungary
NabuccoRomania
NabuccoBulgaria
NabuccoTurkey
Missing link between giant gas sources (in bcm) and potential markets
4,00047,570
1,770
4,520
33,530
Supply Sources for Nabucco
Azerbaidschan10-14 bcm
Egypt Iran10-20 bcm
Iraq8-10 bcm
Nabucco Gas Pipeline Strategic Goals of Project
– Opening a new gas supply corridor for Europe from Middle East and Caspian regions
– Raise transit profiles of participating project countries
– Contribution to security of supply for partner countries and for Europe as a whole
– Strengthening the turntable position of Austrian pipeline grid and the Hub Baumgarten within the European network
VIENNA
BUCHAREST
SOFIA
ANKARA
ISTANBUL
BUDAPEST
Feasibility Study Phase - Findings Technical Study
Project istechnically feasible
Routing corridor defined
Border crossings fixed
Pipeline Diameter: 56“
Distance: 3,300 km Investment: 4.6 bill. €
08 09 10 11 12 13 1403 04 2005 06 07
Project Phases
Feasibility Study
2ndstep
Operating& Marketing
Constr.1st step
Develop-ment
US military around US military around IranIran
Final thoughts...
Central Asia and Caucasus are neighbors of Europe and Iran
Europe is surrounded by sea of gas, Iran is one of them
Divergence is important in energy supply
Instability in CA&C has impacts to the both sides
Interpretation of Islam is a key factor in these areas.
Iran’s path to the free world is Europe via North, during tight situation.