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Created: 6/1/1999

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Progress on Gas Pipeline, but New Challenges Emerge | 14

EURASIA

Analytic Perspective

on Gas Pipeline, but New Challenges Emerge

The signing late last monthas purchase agreement between Turkmen President Niyazov and Turkish Energy Minister Aktasajor step in securing access to ihe Turkish market, but the trans-Caspian gas pipeline (TCP) still faces stiff competition from Russia's Blue Stream projectew Azerbaijani initiative. The TCP through Azerbaijan and Georgia offersay to divert gas exports around Iran, which otherwise could offer Ashgabat an attractive route to Turkish and other European roarkets-

demand is projected to rise from aboutillion cubic meters ibis year to more than SO bemut tbe market is oversubscribed.

TCP is expected to supplycra per year to Turkey andem per year to Europe over the longer terro.l

hasoanerman bank to pay its arrears to the US Export-Importecessary step before project financing of the TCP can proceed.

Competition From Azerbaijan and Russia

If Bakuurchase contract with Ankara, gas exports from Azerbaijan will PMtermuie the feasibility of the TCP.|

Meanwhile, financing for Gazprom's pipeline across the Black Sea to Turkey is moving forward despite technical challenges. Officials from Gazprom andstate-owned pipelinefinancing for the Blue Stream project could be completed this month, with construction of the subsea segment starting this autumn, according to press reports. I

H

The Iranian Fallback

If ihe TCP loses momentum, Ashgabat would be forced io reexamine routes throughas pipeline that initially willoem per year between Iran and Turkey will be finished this year, according to industry press reports.

Spare capacity in Iran's pipeline lo Turkey could be used by Ashgabatwap agreement, in which Turkmenistan supplies northern Iranian markets with Turkmen gas. freeing Iranian gas for export to Turkey.roject would require less than two years0 million in infrastructure investment.

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