Why is the Trans Caspian Pipeline Important?

  • The Caspian region needs reliable and diverse sources of energy

  • The rebuilding of of Nagorno-Karabakh will strain currently available energy resources

  • Other countries want to diversify sources of energy, particularly natural gas

  • The United States considers state stability in Eurasia to be critical

  • The United States considers energy security a priority

  • Ally energy security is a US National Security priority

  • The Southern Gas Corridor (SGC) is now operational

  • The natural gas resources in Turkmenistan give greater value and opportunity to the Eastern legs of the SGC

  • The SGC capacity can be expanded to accommodate more substantial demand in the region for natural gas

  • Azerbaijan and Turkmenistan are communicating and cooperating in unprecedented ways to develop Caspian energy resources

History of the Trans Caspian Natural Gas Pipeline

  • Over the last 15 years, numerous attempts have been made to access Caspian Sea natural gas

  • The most important stakeholders--the two who own the seabed on which the pipeline will lie, Azerbaijan and Turkmenistan--have a challenging history

  • Although Azerbaijan has been effective in working with Western businesses with Western business practices, Turkmenistan has lagged behind in this transition

  • Attempts by international businesses to invest in Turkmenistan to develop natural gas have been met with varying and inconsistent procedures, requirements and  practices

  • Regional discord, outdated business practices and inconsistent leadership priorities are added to, if not prompted by, concern about a Russian response. Russia of course is the northernmost Caspian stakeholder.

Current Situation – What is different now?

  • Over the last few years, a few entities have been dedicated to pursuing the potential of a successful pipeline including the U.S. Government, the European Union (EU), and private business leaders in the region

  • Additionally, there have been substantial policy decisions by end users to codify additional need, and in fact preference, for natural gas.  Two aspects include 1) natural gas as a transitional energy source to move away from coal and oil, and 2) a commitment to renewable technologies, which will require more natural gas to manufacture, as well as implement.  This is particularly true in regard to production of electricity to power technologies like electric vehicles

  • The coronavirus has crippled all the economies of the World.  And although it is a crisis in most aspects, it may motivation these stakeholder countries whose economies are more dependent on the export of natural gas to improve those economies by coming to an agreement on a revenue-generating opportunity - Caspian natural gas

  • Azerbaijan has communicated that it wants the pipeline to proceed.  Since Azerbaijan has export contracts to fill with the gas it produces, it has less for domestic use.  Although Azerbaijan has gas reserves, it is less expensive and easier to pipe gas from existing fields a few dozen kilometers away

  • Numerous financial institutions have communicated renewed interest in participating in the financing of the pipeline.  Potential financing options include US-DFC, JBIC, Middle East counties and companies, SOCAR, and private financial institutions

  • And perhaps most important, Turkmenistan and Azerbaijan have entered into an agreement on the exploration and development of the Dosluk oil and gas field in the middle of the Caspian which straddles the delineation of the Caspian between the two countries. Long regarded as the most challenging stakeholder, and the owner of the gas, Turkmenistan is now engaging in regional partnerships to develop the many energy resources of the Caspian Sea.


Phase I of the Trans Caspian Pipeline (TCP) - The “Connector”

The “connector” is the pipeline that will connect two existing oil/gas platforms in the Caspian Sea--one in Turkmen water, the Banka Livanova gas field (Petronas Global) and the other in Azeri waters, the Azeri Chirag Guneshli gas field (BP).  This 50-mile stretch must be bridged to access the natural gas that will give greater purpose and offer much greater gas reserves to the $34-billion, 2200-mile Southern Gas Corridor.

The president of Turkmenistan wants a large capacity pipeline.  Almost all other advocates/stakeholders suggest a much smaller capacity pipeline to show good faith, prove the concept, and be a “confidence builder.”  TransCaspian US Resources LLC, believes that the best option for the first pipeline would be a pipeline with a capacity between 10 and 12 bcm.  This option would likely be a pipeline that is the most economically viable as well as the least the president of Turkmenistan might accept, particularly if he is “motivated” to create another reliable source of revenue.  Without financial viability, no financing entity will fund it, no international energy company will consider it, no country will agree to it, and no owners will profit.  This venture is not only an effort to do the right thing for the numerous stakeholders, it is also to make a profit while achieving many important goals

Phase II - C5+1

Members of the C5+1 , a USA-backed initiative to bring the Central Asian countries together to discuss and address issues of commonality, will all be positively affected by the TCP connector, Caspian littoral states most of all.  Kazakhstan is likely to be the most excited about the development of the connector after Turkmenistan and Azerbaijan. Kazakhstan has gas and oil it may like to more easily export to the west coast of the Caspian.  Trans Caspian Resources, Inc., can play a pivotal role and enable a number of other energy initiatives, including solar energy, hydrogen and geothermal to name a few after the primary and initial goal of the connector is underway. 

The C5+1 initiative also indicates that the USA is substantially attentive to this region and is dedicated to seeing this region remain stable and prosper.

Why the Opportunity is Real

There have been historic reasons why the Trans Caspian Pipeline has not been achieved. Tribal and cultural discord has been one aspect. Challenges from neighbors another.  But these have either been muted, diminished or overcome in the last couple years.

But the most significant and foundational consideration is financial viability: Can we pay the bills and make a profit?  Since the income is “transit fees” or the cost of transporting natural gas through the pipeline, only if end users are buying natural gas can we send the invoice. The cost end users will pay is a product of the original cost of the gas in Turkmenistan plus the transit fees from each country along the way.  The farther from the Caspian Sea, the more pipelines the gas goes through and the more “fees” transit countries/companies charge. By the time the gas gets to Turkey, the gas is a higher cost than when purchased in Turkmenistan. And although low prices for gas makes for better off taking contracts, too low a price does not allow financial viability. This was the case in 2020 during the pandemic. The price of natural gas has substantially rebounded as economies get back on track. If we add the upward pressure from requirements in Europe to utilize more natural gas to transition away from oil and coal, the price will naturally increase even more substantially.  Further additional upward pressure is likely as a result of the reduction in gas suppliers (particularly due to banning of fracking in the U.S.) - and therefore the reduction in gas supply.  Considering all the factors, the future of gas prices is formidable as is shown in current prices for natural gas in Europe..

How We Will Succeed

TransCaspian US Resources, LLC (TCUSR) is a US-based entity – purposely registered in the United States.  All investors in the LLC are US born citizens.  TCUSR will develop foundational information, initiate relationships with US Government stakeholders, international financing houses, and critical partners while initiating an updated Feasibility Study that will look to validate the business model, partnerships, financing possibilities and governmental support in Eurasia, the US and Europe.  The fundamental rationale for registering the TCUSR in the US is to give the US Government the opportunity to respond to, and support a US company.  Given the potential of uncertain business practices, creative financial arrangements and lack of oversight in some countries, it is a primary objective for the TCUSR to give the US Government and other stakeholders the ability to have a transparent, responsive and accountable partner to work with.

The next phase is the launch of the TransCaspian Resources, Inc. (TCRI), the corporation that will facilitate the creation of the international entity that will own and operate the Trans Caspian Connector Natural Gas Pipeline.  TCRI will invite and include international companies and stakeholders. in its ownership and they will own a majority of the stock of TCRI, and TCUSR LLC will own a minority stake in the corporation.  What is important is that the TCUSR, even as a minority owner, will participate in the TCRI Board of Directors.  This is to ensure that stewardship of the TCRI will have US representation.  Other board members will be appointed by the majority ownership.

This is a dynamic project. There are many US Government supporters, reaching the highest levels. The EU dedicated to decreasing its carbon footprint and natural gas is an almost necessary component in pursuing that goal. And, due to the corona virus economic collapse, the Caspian Region stakeholders are likely to be more motivated to come together to get an agreement done.  This project will affect economies and the well being of people well beyond the borders of the two major country stakeholders - Azerbaijan and Turkmenistan.  As one government official shared, “This is tectonic!”

VISION STATEMENT

Our Vision includes bringing stability and success to the Caspian Region by helping stakeholder countries and companies achieve access to markets for their energy products and thereby enhancing the financial resources, improve constituent happiness, and help secure and maintain the stability and independence of those same stakeholders.

MISSION STATEMENT

Our Mission is to help bring energy resources from Central Asia to markets in the Caucasus.  Inherent in that Mission is our requirement to be transparent, accountable, open and honest with our partners and investors, supporters and clients, customers and constituents.  Trans Caspian Resources Incorporated (TCRI) will be sensitive to the various customs, cultures and environments of the various countries with which we will engage, but we will not use that as a rationale for untoward actions.  Selected projects will be dedicated to bringing economic success to the Trans Caspian Resources Corporation and economic stability to our partners and investors, which means success for host countries.  We will raise the tide.