Yesterday I wrote about the changing Middle East, and wrote that Iran really did need nuclear energy to supply their people with electricity, but that the hotheads were probably trying to use the nuclear reactors to build an atomic bomb to intimidate the neighboring states.
Iran is one of the major petroleum exporters, but ironically it is short of usable energy, so it probably could use nuclear power plants.

One can’t just pump oil from the ground and use it: Oil needs to be refined, and Iran lacks enough oil refineries to supply gasoline for it’s people.

Iran is also a major supplier of natural gas, but it also has to import natural gas from nearby countries. Yet during a recent snowstorm/cold spell, a lot of people lacked natural gas to heat their homes in the Northern and western provinces of Iran. The reason: Turmenistan cut deliveries of Natural Gas via their pipeline.

Today’s BBC reports why:

Turkmenistan has insisted it cut gas to Iran 12 days ago because of a technical fault with the export pipeline and Iran’s failure to pay for supplies….Iranian media reports earlier said Turkmenistan had wanted to double the price for the gas it exports to Iran.

A summary of the Caspian Sea Natural gas fields is HERE, and the photo shows pipelines and proposed new pipelines. 

According to terms of the 25-year contract between the two countries, Turkmenistan will pipe between 177 Bcf and 212 Bcf of natural gas to Iran annually, with 35% of Turkmen supplies allocated as payment for Iran’s contribution to building the pipeline. In December 2001, the presidents of Turkmenistan and Armenia reached an agreement by which Turkmenistan will supply up to 70.6 Bcf per year to Armenia via the Korpezhe-Kurt Kui pipeline and across Iran. Implementation of this deal is contingent on the construction of a long-delayed Iran-Armenia natural gas pipeline.Construction of the $120 million, 84-mile Iran-Armenia pipeline link has been delayed for years due to disagreements between the two sides over natural gas prices and the location of the pipeline.

In addition, any large investment in Iran’s oil and natural gas sector would be legally problematic. U.S. Presidential Executive Orders signed in 1995 prohibit U.S. companies from conducting business with Iran. Furthermore, the U.S. Iran and Libya Sanctions Act of 1996, which was renewed for five years in August 2001, imposes sanctions on non-U.S. companies that make large investments in the Iranian oil and natural gas sectors.

Got that? ZZZZZZ….myeyesglazeover myeyesglazeover…

There is a lot of politics behind this, but it has to do with Russia’s desire to monopolize all petroleum exports from the former Soviet states. LINK

And since a quarter of Europe’s Natural gas comes via the Russian pipelines, you can see how Russia can pressure Europe by the new Transcaspian pipeline. LINK.

Russia, Turkmenistan and Kazakhstan have reached a landmark gas pipeline deal that will strengthen Moscow’s control over Central Asia’s energy export routes… On the face of it, this pipeline deal seems to be all in Russia’s favour. It means that for the foreseeable future, most gas from Turkmenistan and Kazakhstan will be exported via Russia.

More about the pipeline from Wikipedia: The original pipeline was proposed to transport natural gas from central Asia to central Europe, bypassing Russia. This is now changed.

On 12 May 2007 Vladimir Putin of Russia, Nursultan Nazarbayev of Kazakhstan and Gurbanguly Berdimuhammedow of Turkmenistan signed an agreement providing for Central Asian gas to be exported to Europe through the reconstructed and expanded western branch of the Central Asia-Center gas pipeline system, thereby dealing a blow to the hopes that the Trans-Caspian Pipeline will materialise in the nearest future, although Turkmen President Gurbanguly Berdimuhammedow said that the Trans-Caspian pipeline project was not cancelled.[12][13]

It’s not easy to figure out what this means in international terms, since much of the MSM/left wing blogosphere simplifies things into “evil Bush vs the world”.
The way I read this is that Putin wants Russia to be able to monopolize all petroleum and natural gas exports to Europe, and if this means Iran is being screwed by Turkmenistan so that Turkmenistan can raise prices with the threat that if Iran doesn’t pay up, they’ll take their gas and sell it elsewhere.

And Russia will end up making money either way, since it sees Iran as a place to sell it’s nuclear technology, ignoring the possibility that the extremists in the government might divert supplies to make atomic bombs.

Yet Iran even delayed paying the Russians for helping construct it’s nuclear plants last year, resulting in the Russians stopping construction. In December, that problem was resolved.

“Difficulties with the Iranian client are resolved and we have agreement on the timetable for construction,” said the state contractor, Atomstroieksport. The company’s president said details would be released later this month.

Work by engineers on the plant has been dogged by delays. Russia says Iran is behind on payments, but Iran says work has been stalled for political reasons.

So there is a lot more going on in that area of the world than the simplistic analyses one usually reads in much of the news and blogosphere.

I mean, there is a reason that Time Magazine made Putin it’s Man of the Year, and a lot of it has to do with Russia’s influence in the petroleum producing areas of central Asia.


Nancy Reyes is a retired physician living in the rural Philippines. Her website is Finest Kind Clinic and Fishmarket.

Crossposted to Podkayne blog.

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