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U.S.-TURKISH COOPERATION IN THE NIS
Caspian Energy Policy
When the Soviet Union collapsed at the end of 1991, Turkey
recognized all of the newly independent republics without
exception and sought to develop friendly relations with
them.
Azerbaijan, Khyrghstan, Uzbekistan, Kazakhstan, and Turkmenistan
are considered as Turkic Republics and share a common history,
culture and language with Turkey.
It is in both the Turkish and U.S. interest that the countries
in this region succeed in becoming strong, stable and independent
states with free market economies and democratic institutions.
Turkey has signed more than 200 agreements with these republics
regarding economics, education, communications and transport,
technical assistance, and training.
In 1992, Turkey established the Turkish International Cooperation
Agency (TICA) to coordinate and direct assistance provided
to this region. Over $1.2 billion has been provided in programs
and investment credits. Projects include scholarships, private
sector development, technical assistance in telecommunications,
vocational training and humanitarian assistance.
The Turkish private sector is encouraged to work in this
region. At least 400 Turkish companies are involved in investment
projects valued at over $8 billion in sectors such as infrastructure,
commercial and residential construction, agricultural industry,
oil industry, and others.
Turkey from the very outset offered alternative routes
to integrate the newly emerging Caspian basin energy geography
with the global markets.
In January 2000, then-President Demirel proposed a Caucasus
Stability Pact to contribute to the development of the states
in the southern Caucasus, including Armenia, Azerbaijan,
and Georgia. The pact would include Russia, Turkey, the
United States and the European Union as well as international
organizations such as the OSCE.
The U.S. has also actively supported the development of
oil and gas resources in this region, which includes the
Caspian Sea since 1994, and since 1995, advocated multiple
pipelines to export the energy on an “east-west”
corridor. Turkey is an integral part of this policy.
This strategy would shore up the independence and economies
of the countries involved, by providing a market for their
energy products. Providing an alternate source of energy
would also enhance the energy security of the U.S., Turkey
and other allies.
An important component of the East-West Corridor is the
Baku-Tbilisi-Ceyhan oil pipeline project. A pipeline from
Baku, Azerbaijan through Tbilisi, Georgia, to Ceyhan, Turkey
is envisioned as the main export pipeline. In November 1999,
the Governments of Turkey, Georgia and Azerbaijan signed
the basic legal agreements on the construction of this pipeline.
Last November a timetable was laid out to study the engineering
requirements and costs of the pipeline, while Turkey pledged
to finance cost overruns.
This pipeline, which will carry one million barrels of
oil a day, will carry oil from Azerbaijan, Kazakhstan, and
possibly elsewhere around the Caspian Basin to international
markets. Construction may begin in the third quarter of
2001, while operations are envisioned for 2004.
Baku-Tbilisi-Ceyhan is the most environmentally sound route
to transport oil resources from the Caspian, as it would
avoid the increasingly congested Turkish straits.
Turkey is also a promising natural gas market. Turkey’s
gas consumption will reach 50 bcm (billion cubic meters)
per year in the year 2010. For the time being, Turkey imports
12 bcm of gas from Russia and Algeria a year.
As the largest and fastest growing energy market of Europe
and Eurasia, Turkey aims to diversify and increase its gas
supplies. To this end, gas purchase agreements were signed
with Russia and Turkmenistan, and Turkey is currently negotiating
a similar agreement with Azerbaijan.
January 2001
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