New Player in Caspian Sea Power Corridor

September 29, 2009

Competition – or development – of EU’s eastern gas supply routes has intensified this year. Both EU/U.S. backed Nabucco and Russia’s South Stream have made deals to guarantee realization of new pipelines until 2015. The EU’s new “southern corridor” – Nabucco as essential part of it – has been dubbed a version of U.S. “Silk Road Strategy” aimed to block Russia from gas fields around Caspian Sea and its connection to Iran. Russia on the other hand wants direct access to EU markets without transit via Ukraine.

Until this summer the gas game has be seen as battle between Russia and West. Now the world economic crisis and current low price of gas have brought a new player to game in fuel sector – China. With its financial strength China has now had ability to intensify its offensive towards the Caspian Sea energy sources especially in Kazakhstan (especially oil) and Turkmenistan (especially gas). Will the outcome be, that both Russia and Western powers with their companies will lose Caspian oil and gas while it will flow to East? Not necessary but from now on one can not ignore China as key player in region.

As main source related to energy game in Kazakhstan and Turkmenistan I have used Ajdar Kurtov’s fine article “SCO Yekaterinburg summit and China’s energy offensive towards the Caspian Sea”


Back in the 1990s Kazakhstan made easily available its mineral wealth to American, British, French and Italian companies. The bulk of the profit generated was channeled to Kazakhstan’s new partners. A threat loomed large of Kazakhstan turning into a third-world country with a raw exports role to play for the highly-advanced states.

However, Kazakhstan growing stronger economically, socially and politically while the world hydrocarbons market prices shooting up early this century made Kazakhstan leaders think better of their old stands. The new conditions prompted Kazakhstan to reconsider the earlier signed agreements, and Astana specifically proclaimed the objective of establishing state control over the oil and gas sector. The Kazakh authorities brought pressure to bear on the foreign companies in a bid to force the latter to accept changes to the earlier signed contracts.

The national company “KazMunaiGaz” was made responsible for advancing Kazakhstan’s state interests in the oil and gas field institutionally. Initially Kazakhstan leaders applied much the same tactic to pursue the same objective to one of Kazakhstan’s three oil refineries, the Pavlodar refinery, which is located by the Russian border and technologically oriented to Russian oil refining. The facility was privatized in January 1997 and the government’s stake placed in management by the US CCL Oil Ltd. Company on the terms of a public-private partnership agreement. But the Kazakh government prematurely terminated the agreement a few years later and handed over a 51% stake to the OAO “Mangistaumunaigaz”. The company later brought its stock of shares to 58%, with 42% of the Pavlodar oil refinery’s stock capital owned by the state. After that the national company “KazMunaiGaz” bought 51% of the “Mangistaumunaigaz” stock of shares from Indonesia’s Central Asia Petroleum and consequently gained control over the facility.

It was reported on the 16th of April 2009 that amid the world economic crisis Kazakhstan borrowed from China 10 billion dollars during N. Nazarbayev’s visit to Beijing. The Chinese CNPC Company bought a 50% stake of “Mangistaumunaigaz” for 1.4 billion dollars. Kazakhstan leaders are ousting western partners from the hydrocarbons market and refusing to meet Russian companies halfway, while losing ground to China. Chinese companies already own a third of Kazakhstan-produced oil, or more than 20 million tonnes per year. The purchasing of Kazakhstan’s “Mangistaumunaigaz” assets by China’s CNPC further tightens China’s grip on the Kazakh oil market and weakens the positions of Russia and the West in Kazakhstan’s fuel and energy complex.


China’s policy of advancing towards the Caspian Sea region resources is seen also in Turkmenistan. Ashgabat has long discussed the construction of a 6,500 kilometer gas pipeline from Turkmenistan to China to Japan. The construction project was due to be carried out in 10 years and was pretty costly (11 billion dollars, of which some 1.7 billion dollars would account for the sea section of the pipeline). Later the easterly direction of Turkmen natural gas deliveries was sort of “updated”, namely the option for laying a pipeline to Japan was dropped, with China having been made the only terminal point of delivery.

A more important development for Turkmenistan in 2006 was the republic’s president S. Niyazov’s visit to China in early April. The main agreement in a package he signed in Beijing was the General intergovernmental agreement on the implementation of the Turkmenistan – China gas pipeline project and on selling natural gas from Turkmenistan to the People’s Republic of China in the volume of 30 billion cubic metres annually for 30 years since the time the gas pipeline was commissioned, which was due in 2009.

The new Turkmenistan-China gas pipeline will be nearly 6,500 kilometres, with over 180 kilometres due to be laid in Turkmenistan, 530 kilometres, – in Uzbekistan, 1,300 kilometres, – in Kazakhstan, and over 4,500 kilometres, – in China. The overall cost of the project makes up some 20 billion dollars. 17 billion cubic metres of Turkmen gas were due to be annually exported through the development of new gas fields, while the remaining 13 billion cubic metres of annual gas exports,- through the construction of gas purification and treatment plants at the largest gas condensate field Bagtyyarlyk.

The construction of the pipeline (Turkmenistan-China) got under way in 2008 when Russian Company “Stroytransgaz” won 395 m€ contract for laying the Turkmen section of project and also plant to purify and dehydrate gas and a gas-measuring station. The Turkmen stage is expected to be finished by December 2009 and the entire pipeline in late 2010.


On February 21st 2009 the Iranian and Turkmeni governments signed an agreement that will give Iran the rights to develop the Yolotan gas field in Turkmenistan. The deal will help Iran resolve gas supply problems in its north-eastern provinces. Turkmenistan will sell Iran an additional 350 billion cubic feet of gas annually, more than doubling current supplies of almost 300 bcf a year, according to the agreement first disclosed by Iran’s official media and later confirmed by Turkmenistan.Iran also recently offered to invest $1.7 billion for a 10 percent stake in the second phase of Azerbaijan’s huge Shah-Deniz gas field which will come on line by 2014. Iran already has a 10 percent share in the first phase and it wants to import large volumes of gas from the Azeri field. For Iran, the deals couldn’t be better suited to its objectives. It’s economically unviable currently to supply gas to its isolated, north-eastern third of the country. Getting gas from Turkmenistan would therefore make more Iranian gas available for export to Turkey.

Turkmenistan-Afghanistan-Pakistan-India (TAPI)

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline on the other hand would feed natural gas into downstream economies that are desperate for natural gas supplies. Afghanistan is the first of these, and energy shortages are rarely discussed as one of the problems of their economy, but with only 10 – 12% of the populace having access to electricity and with only limited natural gas resources (perhaps enough for a 100 megawatt power station), the country needs to import natural gas in large volumes. Pakistan is still desperate for help with natural gas and other energy fuels. But so far there is no pipeline to help.

There is some base to claim that U.S.military’s involvement in Afghanistan is directly related to the large reserves of natural gas in Turkmenistan. While the U.S. military may be a wholly owned subsidiary of the international (i.e. American and British)oil companies), its anyway clear that demand to increase troop levels in Afghanistan jumped a bit along with the recently publicized discovery of the very large large natural gas reserves in the Yoloten-Osman gas field in southern Turkmenistan.

Some (geo)political remarks

  • In March 1999, the U.S. Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Eastern Mediterranean to Central Asia. The act was revised in 2006 to include the energy interests of the US as one of the primary reasons for the US to be in Afghanistan – note no reference to Osama Bin Laden or Al Qaeda ;The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire along an extensive geographical corridor. The successful implementation of the SRS requires the concurrent “militarization” of the entire Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” pipeline routes and trading corridors. This militarization is largely directed against China, Russia and Iran. More about background of this battle in my articleIs GUUAM dead?
  • As said the new pipeline will run through Uzbekistan and Kazakhstan to Xinjiang in western China. Xinjiang is becoming increasingly important as a transit route for gas pipelines from Russia and Central Asia. Given the vast region’s location several thousand kilometers inside China, it is impractical for the Chinese to protect fully the long stretches of pipelines through Xinjiang’s vast mountains and deserts so they are trying to eliminate the militant groups before the pipelines become operational. So far the unrest in Xijiang has be seen based to ethnic questions. The energy aspect explains why China’s response to unrest is and will be strong also in future.
  • Summit of the Shanghai Cooperation Organization that was called in Yekaterinburg on the 16th of June. Besides some universal ideas in statements and declarations the SCO Energy Club has to this day failed to come up with a cooperation model that would suit all member-states. China’s actions on the ground will lay the basis for actual energy cooperation in the SCO framework since instead of some remote private owner China as state (via state-owned company) is implementing the projects. Promoting energy cooperation in SCO framework must from now on take the “Chinese Factor” seriously.
  • The bad news for Russia is that there is a customer willing to take all the gas that Turkmenistan has for sale: China. It has been steadily gaining access to the energy wealth of Central Asia, while ousting American, European and Russian companies from the area. Beside oil and gas the Chinese are simultaneously planing to transport also the mineral resources in question to China’s western border.
  • For contest between EU’s Nabucco and Russia’s South Stream China’s actions favor later. Today’s arrangements are securing gas for South Stream while Nabucco still is searching supply. It is more clear that Nabucco should be filled with Iraqi and/or Iranian gas and political aspects related to this may delay finding(private) investors and the implementation of project as whole. In bottom line while Russia is taking its part from old gas fields and China from old and new gasfields the Nabucco pipe still is more than half empty.

More about background of Nabucco/South Stream battle in my articles “Is it time to bury Nabucco?” and “EU’s big choice – Nabucco or South Stream?

Quality Peace?

September 21, 2009

To ravage, to slaughter, to usurp under false titles, they call empire; and where they make a desert, they call it peace. (Tacitus, ca. 56 – ca. 117)

On 21 September 1980 Iraq launched a full-scale invasion of Iran, which was the beginning of an 8-year-long bloody war between the two countries. Ironically the International Day of Peace occurs annually on September 21st. It is dedicated to peace, or specifically the absence of war, such as might be occasioned by a temporary ceasefire in a combat zone. Peace is a nice, positive word as well actions to develop it. While world is now celebrating International Peace Day it is good opportunity to look a bit deeper different aspects of peace, which from my point view can be a frozen conflict at worst and a quality peace at its best.

Peace has many definitions. Most common maybe are that it is tranquility, stillness; freedom from contention, violence or war; treaty that ends a war. It is a term that most commonly refers to an absence of hostility; “freedom from civil disorder”. The Nobel Peace Prize is awarded annually to notable peacemakers those who have “done the most or the best work for fraternity between the nations”. Some times it is hard to find connection between the original idea of Nobel Prize and the actual Nobel laureates (about last selection I wrote articles “Do you hear Mr Nobel rolling in his grave” and “500000 bodies or die”)

Quality peace?

To make more mess-up to interpretation of word peace I would like to put one more dimension on the table, an aspect which I call “Quality peace”. With adding quality aspect to definition I try connect peace closer to reality and take it farther away to be only nice word in statements and in high policy. With quality I also understand some degree of sustainability in contrast to Peace Treaties which are forgotten before signature ink is dry.

Since classical times, it has been noted that peace has sometimes been achieved by the victor over the vanquished by the imposition of ruthless measures. Events in Balkans give a good example. After bloody war in Bosnia Dayton agreement brought peace. It was possible because before Dayton the war (1992-95) had almost finished ethnic cleansing/transfer of populations so drawing new administrative boundaries according ethnic groups was not big deal. One can show from statistics that also in Kosovo prevails peace. Why, not because there is multi-ethnic and tolerant society, but because other than Albanian ethnic groups were kicked out to enclaves, north Kosovo or totally out from province. (More e.g. In my article “…Pogrom with Prize”)

Sometimes I have heard claim that democracy could guarantee peace. The challenge to develop higher quality peace is unfortunately more complex. For instance, some one has calculated that the most democratic and the most authoritarian states have few civil wars and intermediate regimes the most. However even peace does not spread democracy, spreading democracy is likely to spread peace.

Peace can mean

  • totalitarian state based to fear and some milder cases economical benefits with low crime records (excluding state-terror which is not recognized as crime)
  • peaceful society (totalitarian dictatorship) can be seen as thread to other societies and this can erupt as violence even war (like peaceful North Korea)
  • keeping peace by international community or outsiders which takes the responsibility out from hands of locals
  • achieving peace at the expense of civil liberties, human rights, multi-cultural or multi-ethnic society
  • structural violence where the peace in society is made through institutionalized elitism, ethnocentrism, racism, sexism or other similar means
  • Mutual assured destruction (MAD) where nuclear weapons have main role in maintaining peace ( e.g. especially during the Cold War)
  • frozen conflict

From peace to quality peace

With quality peace I understand an antithesis to bullet-points above. The core element from my point of view is throughout bottom-up approach. This means that quality peace is not possible to achieve imposed from top to field e.g forced by international community or other outsiders; with that kind of approach one can only freeze the conflict not solve it.

The only way for quality peace is through motivation or at least commitment of individual, clan, community, ethnic groups, wider society or state to resolve conflicts through dialogue by acceptance and at least tolerance of differences.

On the field of international politics there nowadays is lot of discussion about active peace methods including peacemaking, peacekeeping and peace building. From my point of view these practices can not bring peace from outside, they are effective only through local participation and commitment. I can accept preventing genocide by outside intervention – it does not solve origins of conflict but can anyway at its best facilitate further peaceful development because if people are alive they have at least minimal opportunity to implement other aims – even quality peace as outermost goal.

Peace cannot be achieved through violence, it can only be attained through understanding. ~Ralph Waldo Emerson

Note – Background of this article

This article is my contribution to Restore Trust – Rebuild Bridges Campaign implemented online on 9/11 2009. Campaign is a call for civil society action in favor of dialogue launched by the Anna Lindh Foundation and the UN Alliance of Civilizations. Initiatives are aimed at promoting a culture of coexistence and peace in the Euro-Mediterranean region. Last July a Euromed Bloggers Training on Intercultural dialogue was held in Luxembourg, and the 18 bloggers agreed to launch a one shot online campaign for restoring trust and rebuilding bridges e.g. on 9/11 as to counter the hatred discourse generated on this date associated with the assassination of Anna Lindh, the formal minister of foreign affairs of Sweden and with the 9/11 terrorist attacks.

Bottom-Up Approach needed for multi-ethnic society

September 11, 2009

Promoting a culture of coexistence, a multi-ethnic society or at least ethnic tolerance is not an easy task, not even in Europe, not even with help of billions of aid or with “best” western practice. This can be seen especially in Balkans where regions supervised by foreign “expertise” have worst record while regions without these outside high-flown ideas perform relatively better.

My examples for “worst practice” are Bosnia-Herzegovina and Kosovo, where international community has implemented its huge missions over ten years. Both cases have had modest development of civil society but in reality the progress of some original multi-ethnic ideas is going backwards.


Bosnia-Herzegovina is an international creature established by Dayton Agreement on 1995 which split Bosnia into two semi-independent entities – the Serb Republic and the Muslim-Croat Federation. Three ethnic groups – Croats, Serbs and Bosniaks – are trying to lead state together and separately. Entities are united by weak central institutions, while at same time administration is quite heavy loaded with some 170 ministers and whole system is still supervised by international presence.

While earlier dispute was between Serbs and Bosniaks, last year showed serious dissension between Bosniaks and Croats and ethnic divisions are deepening at time when Bosnia-Herzegovina is on the stage of transition from an international protectorate to one responsible for its own reform dynamics. Instead of developing its “European perspective”, Bosnia-Herzegovina going backwards remaining an unwelcome, dysfunctional and divided country, with an aggrieved Bosniak (Muslim) plurality, a frustrated, increasingly defensive Serb entity, and an anxious, existentially threatened Croat population. (More about Dayton and situation in BiH e.g. in my article “Bosnia Collapsing” )


In Kosovo multi-ethnic idea is far away despite EU’s billions. After bombing almost all Albanian refugees have returned while only tiny fraction of Serb refugees – or officially internally displaced persons – have returned to Kosovo. The remaining Serbs in Kosovo are barricaded into enclaves keeping their lives mainly with help of international KFOR troops or in de facto separated Serb majority region in North Kosovo. This has changed former multi-ethnic province more mono-ethnic one.

According the new report – -made by Minority Rights Group International (MRG) gives a bare picture about worsening situation of minority rights in today’s Kosovo. Instead to return to their homes after ethnic cleansing implemented by Kosovo Albanians after Nato intervention 1999 and again 2004 minorities are beginning to leave Kosovo, because they face exclusion and discrimination. More about this in my article “...Pogrom with Prize”.

After nearly ten years of international administration – the longest and most expensive since the creation of the UN – Kosovo remains one of the most segregated places in Europe, with thousands of displaced persons still in camps, and many ‘ethnically pure’ towns and villages. The great failing of international rule in Kosovo over the last eight years has been that instead of breaking down segregation it has made it worse. Kosovo has become ever more divided into Albanian and Serb areas, with all other groups – Bosniaks,Croats, Gorani, Roma, Ashkali, Egyptians and Turks – being marginalized.

One of the most tragic example is the situation of Roma children living in North Mitrovica, Kosovo. So far 81 has already dead after ten years suffering in United Nations Camps for Internally Displaced Persons (IDPs), living in place which is described the most toxic site in Eastern Europe. Their story gives another perspective related to “humanitarian intervention” implemented by Nato and to international administration implemented afterwards. The headline of my article “UN death Camps, EU money, local negligence” tells a lot about this case which shouldn’t had been happen – not during and after “humanitarian intervention”, not during post-conflict capacity building and after billions of EU taxpayers money put to development projects, not in Europe 200 km from EU border, not in international protectorate with “European perspective” or anywhere else.

The core question

When a development program is made like desk plan in Washington or Brussels with some cooperation with state’s central government there always is a risk of more or less big gap between beneficiary needs and centralized aims. Some of these failures I have earlier described in my writings “World Bank destroyed Albanian village in joint operation with corrupted Government…” and “Squandering Kosovo’s Aid Funds”. The key element is the local participation, without it the results can be like in Afghanistan which is going opposite direction than originally intended (more e.g. in my article “Karzai’s administration worse than Taliban”).

Opposite approach is possible. For exampleSerbia could manage the ethnic conflict in Presevo valley quite good without foreign “assistance”. Also in Bosnia-Herzegovina leaders of the three strongest national – Serb, Croat, Bosnian Muslim – parties, met on late 2008, after alarming negative EU reports, with the aim of reaching an agreement over several highly disputed issues that are crucial for country’s EU membership, as well as the closure of the Office of the High Representative, OHR. In only two hours, they reached a general agreement on a process of future constitutional changes, questions that would be covered in 2011 census, as well as regulation of the status of the Brcko district and state property. Deepening talks have continued after this sc Prud Agreement, which will strengthen federation elements while weakening central state power.

Bottom line

It’s said that The Balkans are a graveyard for foreign ambitions. This could be the “lessons learned” to both USA and EU. Some more sustainable solutions could be implemented in Western Balkans. The key question from my point of view is whether western Balkans really needs outside advice or not. The other option could be that instead to be the mastermind of Balkan policy the EU and USA should be facilitators for regional initiatives.

Both in Bosnia-Herzegovina and Kosovo many local stakeholders see implemented rules illegitimate and foreign-imposed – and they are right. Internationally imposed solutions are not sustainable, to get real progress the inter-ethnic agreements must be made at local level.

Related articles:

Kosovo Update

EU’s Kosovo mission widening -Minority situation worsening

World Bank destroyed Albanian village in joint operation with corrupted Government…”

UN death Camps, EU money, local negligence”

Squandering Kosovo’s Aid Funds

Bosnia Collapsing?

Note – Background of this article

This article is my contribution to Restore Trust – Rebuild Bridges Campaign implemented online on 9/11 2009. Campaign is a call for civil society action in favor of dialogue launched by the Anna Lindh Foundation and the UN Alliance of Civilizations. Initiatives are aimed at promoting a culture of coexistence and peace in the Euro-Mediterranean region. Last July a Euromed Bloggers Training on Intercultural dialogue was held in Luxembourg, and the 18 bloggers agreed to launch a one shot online campaign for restoring trust and rebuilding bridges on 9/11 as to counter the hatred discourse generated on this date associated with the assassination of Anna Lindh, the formal minister of foreign affairs of Sweden and with the 9/11 terrorist attacks.

Follow-Up: Organ Trafficking

September 4, 2009

As one response to my earlier article “New Cannibalism in Europe too?” I got a quite good overall description about the problem published in Online Nursing Programs Net on 1st Sep 2009. As follow-up I would like to forward article “10 Truly Shocking Facts about Organ Trafficking” as follows:

Its rare to find a person who hasn’t heard of the urban legend recounting some poor guy duped into a situation that leaves him awakening in a tub of ice with a message indicating he must call 911 as one of his kidneys has been taken. While that particular story is not true, sadly it is based on some very real and shocking truths about organ trafficking. The unbalanced system of too many people in need of organ transplants and high levels of poverty worldwide have contributed to create a situation that leaves many desperate people willing to do anything to sell or receive illegal organs. Read below to learn ten shocking facts about organ trafficking.

  1. People seized against their will. According to a book by UN war crimes prosecutor Carla del Ponte, members of the Kosovo Liberation Army seized hundreds of people for involuntary organ harvesting. The organs were then flown to foreign clinics for transplantation. Kosovo’s ethnic Albanian leaders have denied these allegations.
  2. Organs harvested from children. An investigation was started in Mosambique after several local human rights groups and the Brazilian Mission in Nampula notified authorities that many children were missing vital organs, with several of the children believed to have died as a result of the harvesting. Most of the harvested organs are believed to be sent to nearby South Africa for both transplant and religious rites. There have also been reports of children being kidnapped and killed for their organs in South America.
  3. Outrageous price of kidneys. 2003 estimates from the World Health Organization believe that the price of a trafficked kidney ranges from $700 in South Africa to over $30,000 in the US, with many other countries paying between $1,000 and $10,000 for a kidney. Recent news reports surrounding the corruption scandal in New Jersey indicate that a broker was asking $160,000 for a kidney, unknowingly to an undercover FBI agent.
  4. Sellers denied money and care. Many of the black market kidneys sold worldwide are done so by poor and vulnerable people in desperate need of money. They are typically paid only a fraction of the amount for which they are sold, and sometimes are denied payment by unscrupulous brokers and receive poor or no medical care for their recovery. These donors are often left debilitated by the lack of care, often not fully recovering from the donation. Sometimes entire villages have given their kidneys, like Villivakkum in India that is sometimes referred to as “Kidneyvakkum.”
  5. Go in for an exam, leave without a kidney. In Egypt, one method of organ trafficking revolved around a hiring scheme. Young men were hired for a job and sent to a physician for an exam to ensure their good health. The young men would awaken in a hospital in pain and missing a kidney. Victims of this scheme have faced threats of violence when they have filed charges against those who perpetrated the crime.
  6. Detained and executed for organs. China has been under scrutiny for several years for detaining members of dissident groups in China, executing them, and selling their organs. One American paid $100,000 for a liver to keep his mother alive only to discover that his transaction with a man in Shanghai was likely a part of this Chinese racket that included using a religious group to help facilitate the sale of the liver.
  7. Only legal in one country. Despite the high numbers and rampant disregard for the law, organ trafficking is illegal in all but one country around the world. In Iran, organ sales are legal and closely monitored. The practice of legal organ transactions has eliminated the waiting list for those awaiting a kidney and has provided an increase in post-mortem organ donations, which are not remunerated in Iran.
  8. American rabbis selling organs. Earlier this year, five prominent rabbis in New Jersey were arrested for money laundering and trafficking organs. The rabbis allegedly convinced Israelis to sell their kidneys for $10,000 and then charged up to $160,000 for the kidneys to those in need. The rabbis stated their money came from other sources, with one man claiming the money came from the “diamond business.”
  9. Babies auctioned for organs. Three Ukrainian women were arrested in Italy after auctioning off the unborn child of one of the women. The baby’s mother sold her unborn child for $350,000 euros (about $500,000 US dollars) to undercover officers who posed as drug runners looking for a baby for its organs. The officials believe the gang of women had performed the same transaction with other babies, sometimes selling them for illegal adoptions and sometimes for their organs.
  10. Transplant tourism. Taking advantage of countries that have nebulous definitions of brain-death and often don’t enforce organ trafficking laws, those in need of organs will often travel to places such as Israel, India, and eastern European countries to purchase organs illegally. In South Africa, those arriving for transplant tourism often receive their transplants in hospitals that are more akin to luxury hotels than transplant centers.

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