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Putin’s Eurasian Gas Union Faces Political Headwinds

  • Russia’s proposal has provoked some controversy and discussion in Kazakhstan and Uzbekistan.
  • Astana and Tashkent initially expressed positive reactions to the project.
  • Yet, despite the surge of recent negative reactions, Russia has stubbornly kept the proposal on the table.
Gas

 

In recent weeks, Russia, Kazakhstan and Uzbekistan have been hotly discussing the possibility of establishing a trilateral natural gas union among the three countries. The union, proposed by Russian President Vladimir Putin, is an alliance that aims to coordinate efforts to transport Russian gas through the territories of Kazakhstan and Uzbekistan (Xabardor.uz, November 29, 2022). According to Russia’s plans, the gas union would include cooperation in the transportation, export and processing of natural gas supplies, among other cooperative measures. After publicly announcing the proposal on the tripartite union, the presidents of the three countries exchanged views on the arrangement in their respective bilateral formats (Gazeta.ru, December 12, 2022).

However, Russia’s proposal has provoked some controversy and discussion in Kazakhstan and Uzbekistan, with a number of differing opinions being expressed on the matter (Inbusiness.kz, December 9, 2022). In 2021, gas exports from Kazakhstan and Uzbekistan amounted to 7.2 and 2.38 billion cubic meters, respectively, with a significant volume of overall gas production being used mainly for domestic consumption. The gas that is not used domestically is exported primarily to China (Rus.ozodi.org, December 13, 2022). Given these circumstances, the necessity of such an alliance for Kazakhstan and Uzbekistan comes into question, with the answer girded in Moscow’s need to save its energy sector from the current Western sanctions regime.

As the Kremlin understands that such a proposal will cause a wave a concern with its partners in Central Asia and the international arena, it has given various explanations regarding the need for the gas union. Previously, Russian Deputy Prime Minister Alexander Novak alleged that Uzbekistan had expressed interest in the idea of an energy union. According to Novak, Russia, Kazakhstan, and Uzbekistan have had a single gas transportation system since the time of the Soviet Union, and through the establishment of the proposed union, gas exports to additional markets, namely China, could be developed (TASS, November 29, 2022). Russian presidential spokesman Dmitry Peskov later clarified, however, that the proposed gas union would not involve an exchange of political demands (Vedomosti, December 10, 2022). Additionally, Russian Foreign Minister Sergey Lavrov promised that no “geopolitical games” would be involved in the creation and utilization of such a union (Gazeta.ru, December 12, 2022).

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Nevertheless, though Astana and Tashkent initially expressed positive reactions to the project, more negative feedback soon began to be voiced officially in both countries relating to the lack of economic and political certainty regarding the project’s ultimate goals. Therefore, on November 30, 2022, Kazakhstani Deputy Foreign Minister Roman Vasilenko argued that it was too early to discuss the creation of any sort of gas union. At the same time, he added that Kazakhstan would not allow its territory to be used to circumvent Western sanctions and that the project should be studied by experts who could assess the potential risks posed by sanctions before such a decision was made (Rus.ozodi.org, December 13, 2022). In addition, according to Kazakhstani Minister of Energy Bolat Akchulakov, the three countries involved have been discussing the technical capabilities of gas transmission systems only in bilateral formats. He added that the issue of a “tripartite gas union” has yet to be discussed trilaterally (Darakchi.uz, December 13, 2022). Furthermore, on December 7, 2022, Uzbekistani Minister of Energy Jorabek Mirzamahmudov asserted that gas imports should be carried out only through commercial trade agreements and not through any alliance or union. The Uzbekistani official further contended that political conditions should not be imposed within such an arrangement, adding that Tashkent’s interests should never be jeopardized (Kun.uz, December 11, 2022).

Yet, despite the surge of negative reactions, Russia has stubbornly kept the proposal on the table. To that end, official Russian statements have emphasized that demand for gas in Kazakhstan and Uzbekistan is increasing as domestic consumption grows and their exports obligations expand, and as such, they should discuss the possibility of increasing the supply of Russian gas with Moscow (Gazeta.uz, December 9, 2022; Kun.uz, December 11, 2022). Notably, speaking at the conclusion of the Supreme Eurasian Economic Council meeting in Bishkek, Kyrgyzstan, on December 9, 2022, Putin shared his confidence in the project’s potential mutual benefits for all parties involved.

When it comes to the technical details of the project, Russia is confronted with special financial and infrastructure challenges as a consequence of the West’s sanctions regime. Most notably, it will be necessary to modernize gas transportation infrastructure and even build new gas pipelines. Furthermore, it will be necessary to build a separate gas transmission system through the territory of Kazakhstan to Uzbekistan, the costs of which are still not known. The expected cost of developing internal infrastructure in Russia to supply more gas to Central Asia is estimated at around $4.16 billion (Gazeta.uz, December 9, 2022; Kun.uz, December 11, 2022).

Objectively, Uzbekistan and Kazakhstan may have interests in cooperating in improving their capabilities for exporting natural gas supplies and in attracting additional financial support to develop this infrastructure. Nevertheless, the fear of blowback from Western sanctions is most likely what predetermines the cautious policies of Astana and Tashkent regarding no alliances or unions. In addition, all three of these countries do not have the overall capacity to cover the costs of such expansive infrastructure development, especially due to the current sanctions regime against Russia.

Ultimately, it seems that the union idea was initially proposed to save Russia from Western sanctions. As it is known, Europe is ending its dependency on Russian gas, and Moscow’s ultimate goal may be to form this alliance as a means of still transporting its gas to Europe via Kazakhstani and Uzbekistani territory. Even so, Astana and Tashkent strongly oppose such an arrangement. Thus, uncertainty regarding the potential political motivations for the Russian-proposed tripartite gas union leaves little room for serious consideration of the economic benefits such an alliance might bring.

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By The Jamestown Foundation

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