Will recent Azerbaijan-Türkiye-Turkmenistan leaders' meeting pave way for Trans-Caspian Pipeline? TCP as an apple of discord

On 14 December, the first trilateral summit of the heads of state of Turkmenistan, Azerbaijan, and Türkiye took place in the Turkmen tourist zone Avaza on the Caspian coast. The meeting took place amid the growing efforts of Baku and Ankara to establish multilateral cooperation formats with energy-rich Central Asian nations and make the region more accessible for Western countries. Hence, the summit's main agenda focused on three main topics – energy, transport, trade, and economic relations.

Access to the vitally important Central Asian region through the Caspian Sea makes more sense for the West amid Russia's waning influence and global energy crisis. Moreover, the region is integral to the newly boosted Middle Corridor transit route that stretches from China to Southern Europe via the Caucasus and Türkiye.

However, during the recent meeting in Avaza, the leaders mainly focused on discussing the Trans-Caspian pipeline, which intends to bring Turkmen gas to Europe via the Southern Gas Corridor project. Given the fact that Turkmenistan possesses vast natural gas resources globally, the export of additional volumes of gas could boost the SGC project and the role of Azerbaijan and Türkiye as main transit hubs.

Shortly after the meeting, Turkish President Recep Tayyip Erdogan stressed that the supply of Turkmen gas to Europe through Türkiye would become a crucial step in the energy sector. Although the leaders seemingly did not reach a consensus regarding the project's financial burden, Baku-Ankara is keen to strike a final deal. According to President Erdogan, “Azerbaijan and Turkmenistan need to reach an agreement on the distribution of this burden. If Türkiye becomes part of this process, then Ankara will take part in the costs. If the EU is involved in the case, the representatives of Brussels will also have to participate in the financial issue.”

Notwithstanding the importance, the Trans-Caspian pipeline project has long been a source of discontent among the Caspian states. Traditionally Moscow and Tehran demonstrated strict dissent against the project, referring to the Caspian's legal status and "environmental concerns," whereas Baku and, to some extent, Ashgabat were enthusiastic about moving forward, as the project could have yielded financial benefits.

To ease disputes between the littoral states, Russia, Iran, Azerbaijan, Kazakhstan, and Turkmenistan signed a Convention on the Legal Status of the Caspian Sea in the Kazakh city of Aktau in 2018. The convention established a formula for dividing its resources and prevented other powers from establishing a military presence there. However, the convention did little to settle the disputes regarding the Trans-Caspian pipeline.

Hence, hopes were high in Europe that concrete steps would be taken regarding the Trans-Caspian pipeline during the recent meeting of leaders in Avaza. Reportedly, the project would take up to 24 months to build, with an estimated cost of $5 billion, and deliver up to 30 billion cubic meters (bcm) of gas annually. Indeed, opening such a pipeline via the Caspian Sea would have political significance and broad implications for the global energy market. However, the leaders' meeting concluded with five cooperation agreements, none of which included any plans regarding the Trans-Caspian pipeline.

It should not come as a surprise, as some unofficial reports claim that Ashgabat is “not interested in the modest pipeline interconnector through the Caspian Sea." The modest interconnector plan proposed by Europe is set to replace the costly Trans-Caspian pipeline with a cost of around $500-$800 million in order to bring Turkmen gas to Europe quickly. However, Turkmenistan signalled that it wouldn't get out of bed for anything less than the decades-old idea of a Trans-Caspian pipeline. Even though no certain decisions were made in the Avaza meeting, the pipeline project is still included in Turkmenistan’s agenda.

Hence, speaking at the Abu Dhabi International Petroleum Exhibition and Conference, or ADIPEC, Shahym Abdrahmanov, the deputy prime minister with the portfolio for oil and gas, said the idea of building the TPC “is not being removed from the agenda.”

The controversy regarding Turkmen gas arises in the sense that Europe wants additional gas as soon as possible due to the depletion of sources, while Turkmenistan eyes a comprehensive partnership and more economic benefits. Therefore, it is unlikely that the Turkmen authorities would confirm Europe's Trans-Caspian Connector, a modest version of the TCP. In this vein, Turkmenistan is unpredictable for Azerbaijan and Türkiye, as it wants to impose its own rules and get as many benefits as possible. Although the trilateral cooperation format on the leaders' level will likely deepen in the coming years, it will unlikely have a significant impact on the future TPC project shortly.