Central Asia Gas: Future of Energy security

Overview

Central Asia has become a strategically important region with respect to gas supply security for Europe and the CIS. Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan jointly possess 4.8% of world’s proven gas reserves (about 8.2tcm (trillion cubic meters)). The region is the largest gas supplier for Russian Gazprom and potentially for European Nabucco and Chinese CNPC in the future. Gazprom is channeling more than 60bcm (billion cubic meters) of Central Asian gas to Europe and the CIS, and this figure is growing. The Europe-oriented Nabucco pipeline project is encouraging countries in the region to commit supplies in order to minimize dependence on Gazprom. In its turn, Russia is initiating new alternative routes to Nabucco in order to maintain its position as a primary supplier of gas and its influence on Europe’s energy security. To support growing demand in its economy, China is also trying to maintain and increase its access to and share of the region’s gas.

The Caspian Sea region includes large gas suppliers such as Russia, Iran, Turkmenistan, Kazakhstan, Uzbekistan and Azerbaijan, as well as neighbors with large consumers such as China and India. The energy rich countries possess 47.2% of global gas reserves (81.8tcm) and produce almost one-third of global gas annually. The region has strong potential to capitalize on expanding Chinese and Indian economies that consume more than they produce (68.5bcm and 32bcm, respectively) since their domestic reserves (2.2tcm and 1.1tcm, respectively) are not enough to meet growing demand.