Executive Summary:
- The Iran conflict has made completing the moribund Trans-Caspian Gas Pipeline (TCP) increasingly attractive. Central Asia is looking to export its resources to Europe because of Russia’s waning influence and because of growing natural gas demand as the conflict in the Persian Gulf endangers Europe’s access to Middle Eastern gas.
- The TCP would link Central Asia to Europe via the Southern Gas Corridor and could annually deliver 1.06 trillion cubic feet of gas worth $5 billion. Progress has long been blocked by legal disputes amid the Caspian littoral states and financing challenges.
- Shifting geopolitics—including EU efforts to replace Russian gas, Russia’s pivot from selling gas to Europe to the People’s Republic of China, and conflict in the Persian Gulf—create the best window of opportunity for the TCP’s construction since the project’s inception.
The Iran conflict has made completing the moribund Trans-Caspian Gas Pipeline (TCP) increasingly attractive. The U.S.–Israeli “Operation Epic Fury” attack against Iran, launched on February 28, upended Persian Gulf hydrocarbon energy exports, severely disrupting global trade. The first airstrikes killed Iranian Supreme Leader Ali Khamenei and several senior government and military figures. In response, Iran struck U.S. military facilities in the Persian Gulf and beyond and blockaded the Strait of Hormuz, cutting off international trade through the waterway. Central Asia is increasingly looking to export its resources to Europe as Russia’s influence over the post-Soviet South Caucasus and Central Asia wanes because of its focus on the full-scale invasion of Ukraine, and as natural gas demand grows because conflict endangers Europe’s access to Middle Eastern gas.
The search for alternatives to the nearly 20 percent of global hydrocarbons that transited the Strait of Hormuz is intensifying. Among the most attractive alternative options for Western consumers are the energy assets of the post-Soviet Caucasus and Central Asia, particularly Turkmenistan, whose natural gas exports up to now have been directed to Russia, Iran, and increasingly the People’s Republic of China (PRC). The long-discussed TCP could change that, redirecting a portion of Turkmen and Kazakh gas exports to Europe. Building a subsea Caspian pipeline has been under discussion since 2006, but construction has been stymied by disputes over Caspian subsea sovereignty, geopolitical shifts, logistics issues, and difficulties locating sufficient foreign direct investment (FDI) (Oil and Gas, Natural Resources, and Energy Journal, May 2021).
The TCP would stretch 186 miles (300 kilometers), with a capacity of 30 billion cubic meters (bcm) (1.06 trillion cubic feet) of gas per year, worth approximately $5 billion (Petrocouncil.kz, August 19, 2025). The TCP would run along the Caspian seabed between Turkmenistan’s Türkmenbaşy port and Azerbaijan’s Baku Sangachal Terminal, supplying gas from Turkmenistan and Kazakhstan to the European Union, bypassing Russia and Iran. In Azerbaijan, the pipeline is planned to connect to the South Caucasus Gas Pipeline (CGP), which then connects to the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP), which ends in Italy (Orient.tm, January 14, 2023). This route that connects the South Caucasus to Europe is known as the Southern Gas Corridor (SGC), an initiative of the European Commission for a natural gas supply route from the Caspian and Middle Eastern regions to Europe that circumvents Russia’s control of Soviet-legacy pipeline infrastructure. Azerbaijan and Türkiye have formed a partnership and developed infrastructure that pipes both gas and oil from the Caspian Basin to Europe.
The Kremlin’s full-scale invasion of Ukraine in 2022 spurred the European Union to move toward replacing Russian gas. In January, the European Union’s 27 member states officially adopted the REPowerEU regulation to phase out all remaining imports of Russian pipeline gas and liquefied natural gas (LNG), whether shipped directly or indirectly through third countries. The regulation intensifies previous sanctions and emergency measures implemented in 2022, and defines energy dependence as a clear security risk (GIS, April 21). Europe currently imports more than 85 percent of its gas and has a security imperative to diversify its imports (Euronews, April 23). Following the West’s final severance of its raw materials cooperation with Russia, the Caspian region’s importance has been upgraded to a key role in the post-Soviet space for ensuring Europe’s energy security. The TCP represents a prime opportunity to achieve this goal.
Turkmenistan possesses an estimated 265 trillion cubic feet (tcf) of natural gas and ranks sixth in the world in proven natural gas reserves (Kaspiiskii Vestnik, November 12, 2019; U.S. Energy Information Agency, accessed May 5). In the immediate post-Soviet era, Turkmenistan exported its gas to Russia, but pricing disputes caused Turkmenistan to build an alternative export route to Iran, which also engaged in pricing disputes. The PRC then stepped into the breach. Turkmenistan now supplies 1.41 trillion cubic feet (tcf) of natural gas annually to the PRC via three pipelines (Neft’ Kapital, December 26, 2025). A fourth pipeline will be launched in the early 2030s, with the main portion passing through Uzbekistan and Kazakhstan (Neftegaz.ru, January 7, 2023). Turkmenistan’s complaints about dealing with the PRC are the same as sales to Russia and Iran—importer pressure for the lowest possible price, well below global market averages.
The Iran conflict has halted 20 percent of global liquified natural gas (LNG) supply, causing prices to surge (Reuters, May 1). Natural gas facilities around the Persian Gulf have been attacked, and the threat of further assaults on the region’s energy infrastructure looms. In such an environment, the TCP looks more feasible, being outside the conflict zone. Investment will likely become easier to find, particularly from the European Union. While the PRC is unlikely to relinquish its leadership in Turkmenistan’s energy market, it has significant economic interests in the European Union, which could ameliorate any potential opposition to the TCP so long as its current import levels are safeguarded.
Russia, which has long opposed export competition from Turkmenistan for gas supplies to Europe, is having to look for new markets in the face of the European Union’s plan to stop any Russian gas imports by 2027. The PRC is an obvious destination for Russian exports, although it negotiates for the lowest possible prices. It is possible that Russia would now prefer that Turkmenistan’s exports to the PRC—currently around 80 percent of Turkmenistan’s total gas exports—decrease in favor of Turkmen exports to Europe to make more room in the PRC’s market for Russian gas.
While access to lucrative European gas markets remains Turkmenistan’s highest ambition, other opportunities exist closer to home. In March 2025, seeking to diversify its natural gas supplies, Armenia began discussions with state-owned Turkmengaz to replace its current supplier, Russian state monopoly Gazprom. Adviser to the Turkmen Prime Minister Artashes Tumanian reported that gas would be supplied to Armenia via Iran under a swap scheme. Tumanian clarified that the volume of gas supplies in question would range from 600 million to one billion cubic meters (21–35 billion cubic feet), but the price issue had not yet been resolved (The Moscow Times, March 27, 2025). Tumanian added, “We are also discussing the possibility of transiting Turkmen gas through Armenia to Georgia, and Tbilisi has already agreed to this.”
Earlier this year, former Turkmen President and People’s Council Chairman Gurbanguly Berdymuhammedov said that the major impediment to the construction of the TCP is navigating legal disputes over maritime borders (Ekonomicheskaia Pravda, February 22). From its inception, this issue has been the most significant obstacle to implementing the TCP. During an August 2018 summit in Kazakhstan, after more than twenty years of negotiations, the leaders of the five Caspian littoral states—Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan—signed the Convention on the Legal Status of the Caspian Sea, agreeing on maritime borders, navigation rules, and environmental protections. The convention’s Article 14 states:
Parties may lay trunk submarine pipelines on the bed of the Caspian Sea, on the condition that their projects comply with environmental standards and requirements embodied in international agreements … Submarine cables and pipelines routes shall be determined by agreement with the Party the seabed sector of which is to be crossed by the cable or pipeline” (Ministry of Foreign Affairs of the Russian Federation, August 12, 2018).
Article 14 provides that each littoral state may construct submarine pipelines, but that any other state whose seabed sector the pipeline will traverse must agree to the route (Ministry of Foreign Affairs of the Russian Federation, August 12, 2018; Turkmenistan Segodnia, February 21).
As with all energy projects in the post-Soviet space, the TCP’s funding remains problematic. A relatively new U.S. company has proposed an innovative, inexpensive interim solution—rather than building the entire 186-mile, $5 billion subsea pipeline, construct a 48.3-mile, 10–12 billion cubic meters (353–424 billion cubic feet) per year, Caspian subsea interconnector between Azerbaijan’s Azeri–Chirag–Gunsehli (BP) and Turkmenistan’s Banka Livanova (Petronas Global) offshore fields for roughly one-third the TCP’s cost (Trans Caspian Resources, Inc (TCRI), accessed May 5). According to TCRI, numerous financial institutions have indicated interest in participating in financing the connector, with “potential financing options including U.S. Development Finance Corporation, Japan Bank for International Cooperation, Middle East countries and companies, State Oil Company of the Azerbaijan Republic, and private financial institutions” (TCRI, accessed May 5). The TCRI co-founder and co-chair, former U.S. Ambassador to Turkmenistan Allan Mastard, estimated the cost of the Caspian subsea interconnector to be $500 million–1 billion over two years, an amount that he believes Turkmenistan could self-finance (Trend, August 14, 2023). In May 2025, U.S. Secretary of State Marco Rubio affirmed that completing the segment “would be in the best interest of the United States and our allies” (Steve Daines, May 20, 2025).According to International Energy Agency Head Fatih Birol, it will take two years for the world to recover from energy shortages caused by the conflict in Iran (Neue Zurcher Zeitung, April 17). Russia remains consumed by Ukraine, and Iran is focused on the conflict in the Persian Gulf. With two Caspian littoral states distracted, an opportunity exists for the other littoral states to advance their interests in energy infrastructure. As Birol said, “My golden rule for energy security has always been diversification: never put everything on one card” (Neue Zurcher Zeitung, April 17). Bolstered by new U.S. interest in the region, the best opportunity since 2006 now exists for Turkmenistan’s TCP if it can muster the political will and capital to seize it.
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