WASHINGTON, May 12 (UPI) -- Besides Russia, the former Soviet republics that have hit the energy jackpot are all clustered around the Caspian Sea. While Azerbaijan, with the Baku-Tbilisi-Ceyhan pipeline, is already hardwired into the Western economy, Turkmenistan's potential has yet to be fully developed, and its natural gas exports have been locked in for the foreseeable future first by Russia and, to a lesser extent, by China.
Kazakhstan, while currently relying on the international joint venture Caspian Pipeline Corp. pipeline to Russia's Novorossiysk port on the Black Sea, nevertheless has plans to diversify its export routes to international markets and in this desire has no more ardent suitor than energy-poor Turkey, angling to position itself as the Caspian's premier energy hub.
Turkish intentions were made clear May 6 by Turkish State Minister Kursad Tuzmen in discussions with Kazakh Tourism and Sports Minister Temirhan Minaydarovic Dosmuhambetov, who was in Ankara to attend the Turkey-Kazakhstan Joint Economic Commission meetings.
"The current trade volume between Turkey and Kazakhstan has exceeded $2.3 billion," the Turkish minister said. "If we succeed in developing a single customs code in (all of) Central Asia, we will reach a rapidly increasing trade volume.
"Kazakhstan has a production of 55 million tons of oil and 14.3 billion cubic meters of natural gas. We want to transport Kazakh oil through the Baku-Tbilisi-Ceyhan pipeline and Kazakh natural gas through the Baku-Tbilisi-Erzurum pipeline."
During his visit, Dosmuhambetov was scheduled to sign a Turkey-Kazakhstan Joint Economic Commission protocol along with Turkish State Minister Mustafa Said Yazicioglu. He also met with Turkish Prime Minister Recep Tayyip Erdogan.
It is perhaps symptomatic of increasing interest in Kazakh energy resources that while Kazakh President Nursultan Nazarbayev received the new Turkish ambassador, Attila Gunay, he received new envoys from Romania, Turkmenistan and the Czech Republic at the same time.
Undaunted, Gunay said: "We consider Kazakhstan a fraternal country. In our opinion, Kazakhstan leads not only in Central Asia, but also in the Eurasian region. We know that any political decision of the country affects the entire region."
Ankara certainly has its eyes on the prize. Kazakhstan has the Caspian's largest recoverable crude oil reserves, and its soaring production now accounts for more than half of the Caspian region's approximately 2.8 million barrels per day currently produced. In 2007 Kazakhstan produced approximately 1.45 million bpd; as consumption was a mere 250,000 bpd, Kazakhstan was able to export nearly 1.2 million bpd. At a time of record-high energy prices, by last October the funds in the National Oil fund of Kazakhstan doubled to $20 billion.
Gunay's remarks about Kazakhstan using the BTC pipeline for oil exports and shipping Kazakh natural gas through the Baku-Tbilisi-Erzurum pipeline highlight the difficulties facing Turkish hopes. Kazakhstan does not have an oil or natural gas export pipeline terminating in Baku, and such projects exist solely on paper. Furthermore, the construction of either would be certain to annoy the Caspian's reigning petro-states, Russia and Iran, as such pipelines would bypass them both.
Of Turkey's two competitors, Russia has the upper hand. The CPC, in which Russia owns a 24 percent interest, owns the 982-mile Tengiz-Novorossiysk pipeline, opened in November 2001, which links western Kazakhstan's Kashagan and Karachaganak oil fields with Russia's Novorossiysk-2 Marine Terminal. In 2007 the CPC pipeline transmitted 32.6 million tons of oil.
What Turkey does have in its favor is that its ambitions dovetail nicely with Washington's interests, which include lessening European dependence on Russian energy exports while maintaining its economic blockade of Iran. Such considerations, along with the fact that the BTC has been such a signal success, undoubtedly would loosen Western funding in support of the project. In contrast, Iran can offer only the consideration that a southern route through Iran to the Persian Gulf is the most logical and shortest route to the booming southern and eastern Asian markets.
Moscow, however, is not taking increased Western interest in Kazakh energy lying down. As Gunay was presenting his credentials, in Moscow Russian Industry and Energy Minister Viktor Khristenko and Kazakh Energy and Mineral Resources Minister Sauat Mynbayev were negotiating a common position doubling the CPC's throughput capacity by 2012 from 32 million to 67 million tons of oil annually, just in time to soak up the first production from Kazakhstan's Caspian offshore Kashagan field. While the Kashagan and Karachaganak oil fields were discovered in 1979, their production took off in the post-Soviet era; but it is the massive Kashagan development that really has foreign investors excited, as its estimated 9 billion to 16 billion barrels of reserves are the world's largest confirmed find in the last three decades.
In the end, Turkish interest in Caspian energy is a subset of the U.S.-Russian struggle over Eurasian energy assets. Given the disputed nature of the Caspian's waters, it would seem likely that, for the foreseeable future, Turkish aspirations for involvement in Kazakh energy exports will remain exactly that -- aspirations. As Michael Corleone might say, "It's just business."