Geopolitical Report ISSN 2785-2598 Volume 29 Issue 3
Author: Giuliano Bifolchi
Russia-Uzbekistan-Kazakhstan’s ‘trilateral gas union’ might represent geopolitical leverage in favour of Moscow and Beijing because it might simultaneously satisfy the Chinese energy market’s needs and support the Russian and Chinese foreign policy in Central Asia.
On November 28th, 2022, Russian President Vladimir Putin discussed with Kazakh President Qasym-Zhomart Toqaev the possibility of establishing a ‘trilateral gas union’ between Russia, Kazakhstan and Uzbekistan to support shipments between the three countries and other energy buyers, including China.
On December 7th, 2022, Uzbek Energy Minister Jorabek Mirzamahmudov said in an interview that his country was not interested in giving up its national interests in exchange for natural gas (KunUz). Contemporarily, Kazakhstan did not accept the Russian suggestion quickly, even though Astana declared it would study the idea.
According to Gazeta.uz, in November 2022, the Kremlin offered Uzbekistan a gas supply deal that might have saved the country from the ongoing heating crisis Central Asian republics faced due to a big winter freeze. In exchange for Russian help, Uzbekistan should have transferred its gas transmission system to Gazprom market value and signed the ‘trilateral gas union’ deal to export gas to China (Gazeta.uz).
At the end of February 2023, a spokesperson for the national Kazak gas company QazaqGaz reported that Astana discussed building a gas pipeline linking Russia and China (Neftegaz.ru).
A few days later, at the beginning of March 2023, Russian and international media informed that Uzbekistan was forced into a gas union with Russia. Indeed, on March 3rd, 2023, Uztransgaz explained in its Telegram Channel that the company was working to adapt its pipeline infrastructure to allow it to import fuel from Russia to urgently avoid a repeat of the winter’s chronic gas shortages.
A few hours later, by contrast, the Uzbek company published another status to inform the public opinion that the previous statement on this topic contained incorrect information due to a misunderstanding. Indeed, the company said the installation work on internal communications and main gas pipelines with gas was unrelated to the import of gas from Russia (Uztransgaz Telegram Channel).
The geopolitical scenario of the natural gas market in Central Asia between Russia’s interests and Uzbekistan and Kazakhstan’s needs
Last winter, Kazakhstan and Uzbekistan experienced an acute gas shortage and suspended export to China. The Central Asian republics also had to face a big winter characterised by low temperatures and a severe cold which affected the local population.
If, on the one hand, both Kazakhstan and Uzbekistan could have relied on Russian natural gas export to satisfy their national energy needs and support also their export, on the other hand, at the end of 2022, Astana and Tashkent preferred to ‘save their face’ with the West by no entering into closer relations with Moscow. If, in foreign policy, Kazakhstan and Uzbekistan adopted a strategy of balancing between Russia and the West in a time of confrontation caused by the Ukraine conflict and Western sanctions against Moscow, in domestic policy, Astana and Tashkent had to justify their decision with their citizens, who were experiencing one of the coldest winters of the last decades (Reportjor).
After months of negotiations and official statements to the media, Kazakhstan and Uzbekistan seemed forced to agree with Russia due to their domestic necessities and Moscow’s geopolitical leverage in Central Asia.
Indeed, Russia is a major natural gas exporter, while the amount of natural gas produced by Kazakhstan and Uzbekistan is barely enough for their consumption, with shortages especially acute in winter. The two major economies of the Central Asian region share a gas pipeline to Russia and a pipeline transporting natural gas from Turkmenistan to China.
Moscow has increased its natural gas deliveries to China since European nations began decreasing their dependence on Russian gas amid the Kremlin’s ongoing conflict in Ukraine in late February 2022. Uzbekistan and Kazakhstan have kept their distance from Moscow during the Ukraine conflict even though Russia still plays a decisive role in the Central Asian dynamics, as the Kremlin confirmed during the first “Central Asia – Russia” summit organised in October 2022 (SpecialEurasia).
Why does it matter?
Today China covers 43% of its gas needs through imports. Out of 156 billion cubic meters of gas entering the country in 2021, 34% was delivered via pipelines from Turkmenistan, Myanmar, Russia, Kazakhstan and Uzbekistan.
As the demand for gas in China grows, the import need will increase. Therefore, Beijing must find a new alternative route to cope with domestic needs since the largest suppliers of liquefied natural gas (Australia, Qatar, the United States and Malaysia) cannot completely satisfy the Chinese energy market.
In this context, Beijing has focused on Central Asian republics and Russia since their natural gas is cheaper than other. Indeed, apart from Moscow, which sells its gas to Beijing at a lower price, Uzbekistan also has a low cost of gas, which might respond to the Chinese’ hanger for the blue fuel’.
On the one hand, the ‘trilateral gas union’ might benefit Uzbekistan and Kazakhstan because Tashkent and Astana can fulfil their contractual obligations to China without severe restrictions on domestic gas demand.
Therefore, Uzbekistan will solve the issue of gas shortages both for the domestic market, which is especially important given the growing demand in the country and for export needs. At the same time, Kazakhstan will have the opportunity to create gas infrastructure in its northern and eastern regions as well as modernise its gas transmission system.
Thanks to the ‘trilateral gas deal’, Russia will be able to export its natural gas and increase its revenue after the dramatic decline in supplies registered due to Western sanctions against Moscow, and China will receive uninterrupted pipeline gas supplies, which is especially important in a time of turbulence in the global economy.
On the other hand, a joint pipeline, which involves Russia, Kazakhstan, Kazakhstan, and probably Turkmenistan soon, might allow Moscow to strengthen its presence and influence in Central Asia and counter EU and US attempts to attract local governments in their orbit of influence.
Even though Central Asian republics would benefit from a joint natural gas pipeline because they will increase their export and energy efficiency, by contrast, this infrastructure might cement their dependence on Russia and China.
Considering the current geopolitical scenario in Eurasia, characterised by Russia – West confrontation due to the Ukraine conflict and the US-China competition in the Asia-Pacific (SpecialEurasia), controlling Central Asia is among the main goals that Moscow, Beijing, Brussels and Washington are attempting to reach.
Hence, in a changing multipolar world, the ‘trilateral gas deal’ and the natural gas pipeline might become a geopolitical leverage in favour of Moscow and Beijing and simultaneously an obstacle for the West-Central Asian republics’ project of improving their energy, economic, and political cooperation.
Author: Giuliano Bifolchi