Russia's Pre-Caspian pipeline a blow to EU & U.S.

Russia, Kazakhstan and Turkmenistan have signed an agreement on the construction of the Pre-Caspian gas pipeline along the eastern coast of the Caspian Sea. The U.S. and EU have been pushing for the alternative Trans-Caspian pipeline which would bypass Ru

Russia's Caspian project, known as the Pre-Caspian pipeline, is designed to provide huge reserves of gas from Kazakhstan and Turkmenistan with a route through Russia to European markets.

“This pipeline will provide long-term large supplies of gas to our partners. It will also become a considerable contribution to energy stability in Europe,” said Putin.

“We also discussed our co-operation in atomic energy, in particular the joint construction of an atomic energy station in Kazakhstan and the further integration of the nuclear industrial facilities of our countries,” Kazakh President Nursultan Nazarbayev added.

The agreement was supposed to be signed in September, but the three countries then failed to reach a consensus on prices.

The Pre-Caspian pipeline will be routed via Turkmenistan for about 360 kilometres and another 150 kilometres via Kazakhstan before connecting with the existing Central Asia-Centre gas pipeline network on the Russia-Kazakhstan border.

Transporting 20 billion cubic metres of gas a year, this new gas artery will provide long-term delivery to European energy consumers.

“It is going to be a turning point for a number of reasons. One is that it is a result of a lot of effort on the part of Putin and his government to develop relationships with the Central Asian republics. The second point is that it now really increases the level of participation of the Russian government within the Central Asian region. In some ways we are turning back to the role that was very much part of the Russian history in the 20th century, which was lost for several years,” said Aleksandr Kotchubey, Managing Director of Rencap Investment.

It is expected that all paper work will be over by the end of next year and the pipeline is set to start functioning no longer than in three years’ time.

Meanwhile, the U.S. and European buyers have been pushing for the alternative Trans-Caspian pipeline which would bypass Russia.