US firmly behind Southern Corridor, says Poneman

Aim is to secure access to the Central Asian energy resources

On the heels of US Special Envoy for Eurasian Energy Richard Morningstar’s visit to Astana, another high-ranking American official, US Deputy Secretary of Energy Daniel Poneman, arrived in Kazakhstan, in a move that shows the emphasis the administration of US President Barack Obama is placing on the former Soviet republic’s rich energy resources but also on nuclear and renewable energy. Poneman and Kazakh Energy Minister Sauat Mynbayev signed a joint action plan on energy partnership. Poneman talked to New Europe correspondent in Astana Kulpash Konyrova about energy transport routes east and west, the dangers of relying on Iranian gas for Nabucco and the dollar as a world oil currency.

Mr. Poneman, what is the purpose of your visit to Kazakhstan?

I started my visit from the west of the country, Aktau, where I saw the BN-350 reactor. The trip was quite informative for me. I am very excited about our future cooperation in decommissioning of this reactor and in removing and disposing of the spent fuel. I could also see with my own eyes the economic development of a region whose oil fields are in the focus of so many countries worldwide. It was interesting to learn firsthand about the possibilities of moving crude from there by the KCTS (Kazakhstan Caspian Transportation System). I also had an opportunity to visit the Tengiz oil field and was impressed not so much with the scale of operations of the oil companies there as with how the specialists from different countries work together on the resources of that region, and with the growing level of technology there. Then, in Almaty at KIOGE I met with KazMunaiGas President Kairgeldy Kabyldin. And in Astana I met with my old acquaintance, Mr. Saudabaev, whom I had known from the time of his ambassadorship in the USA. Here, in Astana, the main part of my visit took place. The Minister of Energy Sauat Saudabaev and I have signed a joint statement on energy cooperation.

What is the essence of the new document?

We want to considerably expand our cooperation. We already have strong partnership in the oil and gas sector. Now the cooperation in the traditional sector will be expanded to include new areas pertaining to nuclear security that President Nursultan Nazarbaev talked about on many occasions. Today we also focus our attention on nuclear energy and renewable energy. And I hope that they will become a new basis for our future contacts.

At the recent IV Eurasian Energy Forum in Astana, former German chancellor Gerhard Schroeder said that for realization of the Nabucco project it is important that the EU receives gas from Iran. What is your position on that?

You would agree that it is very important today for the energy consumers to have access to oil and gas through various transport routes. And we are studying the market to understand what transport route should be developed today based on the interests of the consumers and producers. As far as gas is concerned, at this time we focus our attention on the Southern Corridor that includes Nabucco (Southern Corridor – routes to deliver gas to Europe from Central Asia through the Caucasus bypassing Russia). As far as Iran is concerned, there are certain difficulties here. As you know, Iran has defaulted on its nuclear non-proliferation obligations. The IAEA has tried to obtain information from Iran about the country’s nuclear programme, but alas! This causes our serious concerns. As you know, a second centre for uranium enrichment has been found near the Iranian city of Kum. Clearly, with the high secrecy of its construction, it was not meant for civil nuclear industry. Representatives of the countries that worked with Iran on nuclear technologies are still in ongoing negotiations. Therefore, I believe it is premature at this time to consider Iran as a possible supplier of oil and gas.

Can you comment on press reports that some countries, especially in the Persian Gulf, are suggesting replacing the dollar as the prime currency on world oil markets with a basket of currencies?

At this point it is difficult for me to comment on this news. However, I can say one thing: it is an obvious fact that for a long period of time the world has trusted the American dollar, including these same Persian states. And we believe that this will continue. Confidence in the US dollar will allow the countries and people to rely on it again and again. As for the countries that will be making their payments, settlements are already done in different currencies.

What do you think about a possible change of direction for hydrocarbons from west to east towards China?

Everything is dictated by the laws of the market: supply and demand. Clearly there exists a high demand today for energy both in Europe and China. And what volumes will go west or east will depend on the market and on the price negotiations between the producers and the consumers of the energy resources. But we do not approve if somewhere access is denied to energy resources. This is why we support the construction of the Southern Corridor. However, it is not our view that this is the only route for the gas to go.

For the Central Asian energy resources to reach Europe it is necessary to resolve regional conflicts in the transit countries. Experts say the relationship between the US and Azerbaijan, especially in energy, will depend very much on how the Nagorno Karabakh conflict will be resolved?

The United States is paying serious attention to the problem of Nagorno Karabakh. Recently our ambassador and the Minsk Group went to Baku to discuss the issue. We hope that they will finally make progress and resolve this protracted conflict through negotiations. But we believe that the energy matters should be decided separately from this problem, through the market laws. Our aim is to secure access to the Central Asian energy resources through the Southern Corridor.

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