Robert M. Cutler on Energy and Eurasia

In mid-January, the first multilateral meeting of parties interested in the Trans-Caspian Gas Pipeline (TCGP), which will carry natural gas from Turkmenistan to Turkey, was held in Ashgabat. It included the countries concerned, parties to the TCGP consortium that will be building the TCGP and interested observers. TCGP consortium is 50% owned by PSG International, which in turn includes the U.S. companies GE Capital and Bechtel, plus Royal Dutch/Shell. It has been known for some time that the initial volume of gas to be pumped through the TCGP will be 16 billion cubic meters per year, subsequently to be raised to 30 billion. As in the case of the Baku-Ceyhan main export pipeline (MEP) for Azerbaijani oil, the fact that the pipeline will traverse more than two countries makes the negotiations technically intricate.

SUMMARY: President Islam Karimov's reelection in Uzbekistan has been followed by his statement that a program of economic liberalization and privatization will now be introduced in the country. Currency controls on the Uzbek som and its less than full convertibility, have been the greatest roadblocks to the overall development of the Central Asian trading block, called the Central Asian Union, that includes Uzbekistan, Kazakhstan, Kyrgyzstan, and Tajikistan. If barriers including bilateral trade tariffs can be overcome, the Central Asian Union holds the greatest potential to reanimate regional trade throughout the Central Asian region.