海角吃瓜网

Kazakhstan again looks to China

According to the IMF, Kazakhstan was set to have the region海角吃瓜网檚 worst performing economy in 2015, as its growth will slow to just 1.5% from nearly a third of the previous year海角吃瓜网檚 4.3% rate. A toxic combination of low oil prices, weak domestic demand and decline in external trade will likely turn the country海角吃瓜网檚 years of fiscal and current account surpluses into deficits in 2015.

Central Asia海角吃瓜网檚 largest economy is also paying the price for its heavy economic dependence on sanctions-hit Russia and slowing China, an ironclad formula that produced annual double-digit growth most of this century when those two countries were super performers themselves. All of Central Asia is hurting from Russia海角吃瓜网檚 sharply devalued currency and recessed economy hit by Western sanctions over Moscow海角吃瓜网檚 conflict in Ukraine.

In response, Kazakhstan devalued its tenge by 19% against the US dollar in 2014 and allowed it to sink another 26% in 2015.

According to the World Bank, Kazakhstan海角吃瓜网檚 dire condition reflects the combination of 海角吃瓜网渇alling oil prices, recession in Russia, declining confidence, and lower capital inflows.海角吃瓜网� Kazakhstan relies on crude oil for about 70% of its export revenues, and sales of various commodities to Russia for around 7% of annual export earnings.

Thanks largely to Beijing海角吃瓜网檚 financial and political support, Kazakhstan, Turkmenistan and Uzbekistan were able to develop the foundation of Central Asia海角吃瓜网檚 new pipeline network and infrastructure to export oil and gas to China. On 12 December 2009, President Nursultan Nazarbayev and other Central Asian leaders together with China海角吃瓜网檚 then president Hu Jintao jointly inaugurated the Kazakh section that started up the 1833 km Central Asia-China gas pipeline network. Two days later, the Chinese leader was in Turkmenistan to complete the launch of the new pipeline network that has played a major role in Central Asia海角吃瓜网檚 economic take-off this decade.

From just over US$6.8 billion in 2005, Sino-Kazakhstan trade rose to US$20 billion in 2010 and US$28 billion in 2013 as China海角吃瓜网檚 gas demand surged. But reflecting the slowdown in both economies and the decline in oil and gas prices, bilateral trade value plunged by over 21% in 2014. The two sides have scaled back their plans and are aiming to achieve bilateral trade of US$40 billion by 2020 instead of 2016.

Having already invested more than US$17 billion in Kazakhstan, China expects to face renewed competition from the US, which says its companies have poured in a total of US$21 billion into the country. Chinese firms will implement rail and road projects through Kazakhstan as part of Beijing海角吃瓜网檚 plan to link up the continents of Asia and Europe under its Silk Road strategy.

For its contribution to the Kazakh economy, China may yet land the most coveted prize: approval for state-owned China National Petroleum Corporation (CNPC) to buy into the giant northwestern Karachaganak gas condensate field to add to its 8.33% stake in the Kashagan oilfield.

Doubts persist over proposed TAPI gas pipeline

Turkmenistan, the region海角吃瓜网檚 strongest economy, is looking to the construction of Asia海角吃瓜网檚 most ambitious pipeline project to provide the next leg of its economic development with a plan to supply natural gas to Afghanistan, Pakistan and India.

On 13 December, Turkmenistan海角吃瓜网檚 President Gurbanguly Berdimuhamedow together with Afghanistan海角吃瓜网檚 President Ashraf Ghani, Pakistan海角吃瓜网檚 Prime Minister Nawaz Sharif and India海角吃瓜网檚 Vice President Hamid Ansari jointly launched the construction of the TAPI project in the eastern Turkmen province of Mary.

At the ceremony, Berdymukhamedov said the pipeline will start-up by December 2019, with an annual capacity to deliver 33 billion m3 of natural gas. Despite his confident prediction, the project is shrouded in doubt owing to a myriad of financial, political and security problems that have repeatedly delayed its implementation the last two decades.

The project aims to tap Turkmenistan海角吃瓜网檚 giant Galkynysh field, which holds estimated reserves of 16 trillion ft3 of natural gas to feed the region海角吃瓜网檚 growing energy demand. Boosted by Galkynysh海角吃瓜网檚 start-up in September 2013, Turkmenistan has raised its annual natural gas production to around 70 billion m3.

According to the US Energy Information Administration (EIA), Turkmenistan, owner of the world海角吃瓜网檚 fourth largest gas reserves, exported 42.4 billion m3 of the fuel through a network of pipelines in 2014. More than half of that went to China with the rest delivered mostly to Russia and Iran. In the race for Central Asia海角吃瓜网檚 oil and gas reserves, China has locked up Turkmenistan海角吃瓜网檚 rising gas output by signing a series of long-term contracts for a total of more than 65 trillion m3 by 2020.

China海角吃瓜网檚 launch of the Central Asia-China Gas Pipeline in 2009 has given it a huge first-mover advantage on tapping the region海角吃瓜网檚 oil and gas reserves.Worried that they will be left out of Central Asia海角吃瓜网檚 海角吃瓜网榞as rush海角吃瓜网�, Afghanistan, Pakistan and India along with Nepal and Bangladesh are hoping to hurry up the development of TAPI with the Asian Development Bank as project adviser.

According to the ADB, the state gas companies of the four countries established a joint venture last year to build, own and operate the pipeline to export up to 33 billion m3/y of natural gas from Turkmenistan to Afghanistan, Pakistan, and India for 30 years. The TAPI gas pipeline network will be equally owned by state-owned Turkmengas, Afghan Gas Enterprise, Pakistan海角吃瓜网檚 Inter State Gas Systems (Private) Limited, and GAIL (India) Limited.

Of growing concern is that Turkmenistan, TAPI海角吃瓜网檚 lead developer, and the other consortium members have been unable to attract the participation of international investors. Malaysia海角吃瓜网檚 Petronas and France海角吃瓜网檚 Total have been mentioned as likely participants, while US majors ExxonMobil and Chevron have pulled out after their request for equity stakes in Turkmenistan海角吃瓜网檚 gas fields were rejected.

Written by Ng Weng Hoong and edited by

To read the full version of this article, please download a copy of the issue of World 海角吃瓜网.

Read the article online at: /special-reports/28032016/the-battle-for-central-asia-part-2/