Reports of recent Ukrainian drone attacks on oil and gas installations inside Russia, linked to international energy infrastructure, are particularly noteworthy in light of the ongoing changes in global logistics, as this incident may catalyze a shift toward alternative transit routes through Central Asia, prompted by the increasing concerns about the reliability of Russian transit routes.
Earlier this month, Russia claimed to have repelled a Ukrainian drone attack on a compressor station that is part of the TurkStream pipeline system taking Russian gas to Europe.
“In repelling the attack, Russian air defences downed three Ukrainian drones at a safe distance from the compressor station,” the Russian Defence Ministry reportedly said in statement issued on March 1st, referring to the ‘Russkaya’ station in southern Russia’s Krasnodar region.
The TurkStream gas pipeline, measuring 930 kilometers (or 580 miles) in length, runs beneath the Black Sea from Anapa in Russia to Kıyıköy located in northwestern Turkey, where it connects with overland pipelines that transport gas through the Balkans to western Europe. Compressor stations are used to regulate the gas pressure and flow rate.
This pipeline has a total annual capacity of 31.5 billion cubic meters (bcm), with 15.75 bcm set aside for Turkey’s domestic consumers, and the rest designated for European countries.
TurkStream and Blue Stream are now the only remaining pipelines for Russia to supply gas to Europe, following Ukraine’s decision at the start of the year to not renew a transit deal that was enabling the transit of Russian gas to Europe through its territory.
The 27-member European Union (EU) has been taking steps to reduce its dependence on Russian gas since Russia’s invasion of Ukraine in February 2022, however, many European countries still rely considerably on Russian gas to fulfill their energy requirements.
For instance, shortly after Ukraine’s alleged attack on TurkStream gas pipeline, Hungarian Foreign Minister Peter Szijjarto, whose country receives Russian gas through this pipeline, said in a Facebook post that the functioning of TurkStream is critical to Hungary’s energy security, and called upon the EU to ensure that infrastructure associated with the 27-member bloc remains safeguarded against any potential attacks.
Ukrainian armed forces, in recent months, have been repeatedly attacking Russia’s energy infrastructure using drones.
Shortly before this alleged Ukrainian drone attack on the Russkaya compressor station, several Ukrainian drones struck the Kropotkin oil pumping station located in Russia’s Kavkazsky District, an important installation within the Caspian Pipeline Consortium’s (or the CPC’s) 1,511-kilometer-long Tengiz-Novorossiysk pipeline, which plays a major role in the movement of crude oil from Kazakhstan to international markets.
Per a Reuters report quoting a source at Ukraine’s SBU security service, the Kropotkin oil pumping station was among the two Russian energy facilities struck by the Ukrainian armed forces for their involvement in support for Russia’s war effort in Ukraine.
The Ukrainian attack involved seven drones armed with explosives and shrapnel, and inflicted extensive damage to the oil pumping facility. Per the statement from the Russian company Transneft, recovery of the pumping station’s functionality will take one to two months, which is expected to cause 30 percent reduction in the volume of oil pumped from Kazakhstan.
The Tengiz-Novorossiysk pipeline connects the oil fields of western Kazakhstan with Russia’s Black Sea coast, and is said to carry four-fifths of Kazakh oil exports, making it a crucial facility for a country like Kazakhstan, which relies on oil and gas revenues for half of its national budget.
Reports suggest that the Ukrainian drone attack on the Tengiz-Novorossiysk pipeline was an alleged response from Kyiv to Kazakhstan’s alignment with Hungary in supporting the idea of talks concerning the Ukraine conflict between Russian President Vladimir Putin and the US President Donald Trump, along with discussions between Russian Foreign Minister Sergey Lavrov and the US diplomat Marco Rubio.
“Why was specific international oil pipeline targeted when numerous purely Russian oil pipelines exist on its territory? Furthermore, what relevance does this have to Kazakhstan, which has not shown support for Russia’s actions in Ukraine, but will lose a significant portion of its income?” asked the Former Prime Minister of the Kyrgyz Republic, Djoomart Otorbaev, in his LinkedIn Post shortly after this attack.
That said, it is important to view these reports of Ukrainian attacks on Russian critical infrastructure in the context of their impact on global transport and logistics, which in the Authors view are possibly irreversible even if the crisis in Ukraine somehow comes to an end in the near future.
Is The War In Ukraine Diminishing Russia’s Status In Global Transport And Logistics?
The onset of Russian military actions in Ukraine seems to have set a shift in global trade and commerce, wherein Russia appears to be losing its influence in the post-Soviet space, with Turkey, Azerbaijan and Kazakhstan moving in both the places.
For instance, in the natural gas segment, in its efforts to lessen reliance on the Russian natural gas following Russia’s invasion of Ukraine in February 2022, the EU block has been strengthening its energy ties with gas-rich Azerbaijan, and now it reportedly seeks to begin acquiring natural gas from Turkmenistan.
Russia’s Declining Status In Global Energy Markets
On June 4, 2024, Turkey’s Botas Petroleum Pipeline and the State Oil Company of the Republic of Azerbaijan (SOCAR) signed a deal aiming to jointly facilitate the transportation of natural gas from Turkmenistan to Azerbaijan for it to be routed through Turkey to other nations.
In February of this year, the national gas company of Turkmenistan, Turkmengaz signed an agreement with BOTAŞ to supply Turkmen gas to Turkey via a swap deal through Iran, initially planning to deliver up to 2 bcm annually starting March 1, with plans to expand this volume to 15 bcm per year, targeting the European market.
Now, there have been concerns about the viability of this swap deal, as Iran is likely to face a new round of sanctions targeting its energy sector from the US under Trump administration, however, it is important to consider the remarks made by Matthew Klimow, the US ambassador to Turkmenistan, earlier this year, which seem to have been intended to alleviate these concerns.
“It depends on a lot of factors,” he said. “For example, the transfer of gas to Azerbaijan via a swap through Iran does not violate sanctions. Therefore, it will depend on how this deal is structured.” He also praised Ashgabat’s efforts to diversify its energy supplies to the West, which is critical for reducing Turkmenistan’s dependency on China, its primary export market.
Sanctions aside, there are other problems with Iran as a transit country for Turkmen gas, as historically, Iran has exhibited a tendency to prioritize its domestic energy requirements over its export obligations particularly during the winter months when the demand for heating and electricity rises significantly. On several occasions, Tehran has suspended gas deliveries to Turkey, citing technical difficulties compounded by freezing temperatures.
Furthermore, the energy sector in Iran is plagued by insufficient investment and outdated infrastructure because of the international sanctions, which casts doubt on its capacity to ensure consistent gas supplies. So, this new swap deal with Iran ought to be regarded as susceptible to possible disruptions in the future.
Therefore, Turkish officials have been repeatedly advocating for the construction of a gas pipeline passing through the Caspian Sea, so as to enable the transport of larger volumes of natural gas, and more reliably. However, financial and geopolitical challenges stand in the way of such a subsea pipeline across the Caspian Sea.
The Caspian Sea’s legal status remains unresolved. The five littoral states, namely, Azerbaijan, Turkmenistan, Kazakhstan, Iran, and Russia, signed the Convention on the Legal Status of the Caspian Sea in 2018, which facilitates pipeline development but leaves several critical legal matters unresolved, especially concerning the delineation of the seabed.
Of the aforementioned littoral states, Russia and Iran view a trans-Caspian pipeline as a threat to their influence over regional energy exports. In particular, Moscow fears that such a subsea pipeline could potentially result into Turkmen gas replacing Russian gas in the EU.
Other than that, the success of such a trans-Caspian pipeline hinges on securing long-term financial commitments, which is highly unlikely without supply contracts lasting at least 20 years to ensure profitability, and prospects for such a long-term contract appear dim due to the EU’s stringent climate goals.
Even Azerbaijan, which is already supplying gas to the EU, and has pledged to increase its gas supply up to 20 bcm annually by 2027, is expected to find it challenging to fulfil this pledge, as it has been struggling to secure long-term gas supply agreements with European companies who are reluctant to finance fossil fuel infrastructure.
Also, the EU is expecting new liquefied natural gas (LNG) supplies starting in 2026, mainly from Qatar. So, it is far from certain how much gas Europe will actually need from Azerbaijan by this decade’s end, let alone Turkmenistan, which has only just begun supplying gas to Turkey via a swap deal through Iran.
So, overall, the the economic feasibility of a trans-Caspian pipeline remains uncertain. Nevertheless, the option is not completely off the table.
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