RusEnergy

30 November 2006 - Upstream onLine - The European Union, wary of its dependence on Russian natural gas, sees Kazakhstan as a key potential energy supplier, EU Energy Commissioner Andris Piebalgs said today. Russia is the EU's biggest energy supplier but the bloc is trying to diversify its supplies to reduce the risk of disruption. Ex-Soviet states Ukraine and Georgia have each been left for a short period this year without Russian gas. Piebalgs told reporters in the Kazakh capital Astana late last night that construction of a proposed new Trans-Caspian natural gas pipeline could help EU efforts to diversify energy supplies away from Russia. "Russia is a good supplier but we saw what happened, say, in Georgia when the pipeline was exploded, which left Georgia in the dark and cold," Piebalgs said. "First of all, diversification helps avoid trouble. Secondly, it creates liquidity on the market." Georgia struggled with limited supplies of natural gas after two explosions in January hit a pipeline in Russia carrying supplies to the Caucasus republic. At the moment, the only way to export gas from Central Asia to Europe is via Russia's pipeline network, controlled by state monopoly Gazprom . Piebalgs said the European Union was in talks with Kazakhstan over a number of projects. "As for gas, the EU sees Kazakhstan as a potential supplier," he said. "We are working on several concrete projects. We have started examining a project linked to the possibility of gas transit across the Caspian Sea. It's a good start." Europe gets a quarter of its gas from Russia. Most Kazakh oil and gas deposits are in its part of the Caspian Sea, and its main concern is export routes. Kazakhstan is a close political ally of Russia but it also wants to avoid dependence on Gazprom's transit network as it seeks to raise its weight as a gas exporter on the global market. Kazakhstan has built an oil pipeline serving China and wants to export oil through the Baku-Tbilisi-Ceyhan pipeline that avoids Russia and runs from Azerbaijan to Turkey. It has supported EU proposals for a natural gas pipeline across the Caspian to link the Kazakh oil port of Aktau with the Azeri capital Baku. Russia is against that route.