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Central Asian gas in Eurasian power game

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  • Cobanli, Onur

Abstract

Following the dissolution of the Soviet Union, various gas pipeline projects have been proposed to diversify transit routes and export markets of the landlocked Central Asian states. To evaluate the pipeline project's impact on the players' bargaining power, I apply the cooperate game theory to a quantitative model of the Eurasian gas trade and quantify the bargaining power structure via the Shapley value. Due to ample production capacities in Central Asia, I observe little strategic interaction between the West and China. Thus, demand competition with China is not necessarily a disadvantage for the West, and the Turkmenistan–China pipeline does not affect the impact of the westbound projects aiming Europe and Turkey. For Turkmenistan, i.e., the main supplier in the region, a link via the Caspian Sea to Turkey is the most beneficial westbound option. Although the projects carrying gas from Azerbaijan and Turkmenistan to Europe enjoy the European Commission's political support, they yield marginal benefits to the European consumers. Thanks to its transit position, Turkey collects a large share of the benefits in the East–West gas trade.

Suggested Citation

  • Cobanli, Onur, 2014. "Central Asian gas in Eurasian power game," Energy Policy, Elsevier, vol. 68(C), pages 348-370.
    • Handle: RePEc:eee:enepol:v:68:y:2014:i:c:p:348-370
    DOI: 10.1016/j.enpol.2013.12.027
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    1. Aigerim Ibrayeva & Dmitriy V. Sannikov & Marsel A. Kadyrov & Vladimir N. Zapevalov & Elnur L. Hasanov & Vladimir N. Zuev, 2018. "Importance of the Caspian Countries for the European Union Energy Security," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 150-159.
    2. Csercsik, Dávid & Hubert, Franz & Sziklai, Balázs R. & Kóczy, László Á., 2019. "Modeling transfer profits as externalities in a cooperative game-theoretic model of natural gas networks," Energy Economics, Elsevier, vol. 80(C), pages 355-365.
    3. Mihai Daniel Roman & Diana Mihaela Stanculescu, 2021. "An Analysis of Countries’ Bargaining Power Derived from the Natural Gas Transportation System Using a Cooperative Game Theory Model," Energies, MDPI, vol. 14(12), pages 1-13, June.
    4. Rasoulinezhad, Ehsan & Sung, Jinsok & Talipova, Amina & Taghizadeh-Hesary, Farhad, 2022. "Analyzing energy trade policy in Central Asia using the intercountry trade force approach," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 441-454.
    5. Hubert, Franz & Orlova, Ekaterina, 2018. "Network access and market power," Energy Economics, Elsevier, vol. 76(C), pages 170-185.
    6. Sziklai, Balázs R. & Kóczy, László Á. & Csercsik, Dávid, 2020. "The impact of Nord Stream 2 on the European gas market bargaining positions," Energy Policy, Elsevier, vol. 144(C).
    7. Natalia Iwaszczuk & Jacek Wolak & Aleksander Iwaszczuk, 2021. "Turkmenistan’s Gas Sector Development Scenarios Based on Econometric and SWOT Analysis," Energies, MDPI, vol. 14(10), pages 1-18, May.
    8. Tobias Baltensperger & Rudolf M. Fuchslin & Pius Krutli & John Lygeros, 2015. "European Union gas market development," Papers 1512.05343, arXiv.org.
    9. Hubert Franz & Cobanli Onur, 2015. "Pipeline Power: A Case Study of Strategic Network Investments," Review of Network Economics, De Gruyter, vol. 14(2), pages 75-110, June.
    10. Fei Wang & Changjian Wang & Jing Chen & Zeng Li & Ling Li, 2020. "Examining the determinants of energy-related carbon emissions in Central Asia: country-level LMDI and EKC analysis during different phases," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7743-7769, December.
    11. Baltensperger, Tobias & Füchslin, Rudolf M. & Krütli, Pius & Lygeros, John, 2017. "European Union gas market development," Energy Economics, Elsevier, vol. 66(C), pages 466-479.
    12. Aram Lee & Jeonghwan Kim, 2023. "Analysis of Bargaining Power between the EU and Russia by Altering Gas Supply Network Structure," Sustainability, MDPI, vol. 15(5), pages 1-12, March.
    13. Erick González & Rafael Alejandro Espín & Eduardo Fernández, 2016. "Negotiation Based on Fuzzy Logic and Knowledge Engineering: Some Case Studies," Group Decision and Negotiation, Springer, vol. 25(2), pages 373-397, March.
    14. Balazs Sziklai & Laszlo A. Koczy & David Csercsik, 2018. "The geopolitical impact of Nord Stream 2," KRTK-KTI WORKING PAPERS 1821, Institute of Economics, Centre for Economic and Regional Studies.
    15. Bouwmeester, Maaike C. & Scholtens, Bert, 2017. "Cross-border investment expenditure spillovers in European gas infrastructure," Energy Policy, Elsevier, vol. 107(C), pages 371-380.

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