BERLIN, Sept 13 (Askume) – German Chancellor Olaf Scholz will embark on his first trip to Central Asia on Sunday, visiting Kazakhstan and Uzbekistan, where Berlin is seeking new markets and energy and mineral resources after the war in Ukraine.
He has struck some important deals. Kazakh crude began flowing through the Druzhba pipeline last year and Berlin’s Schwedt refinery remained operational despite EU sanctions on Moscow and a drop in Russian supplies.
A Kazakh government official said, “This marks a new direction for bilateral cooperation, as Kazakh oil has never flowed through this pipeline before.”
Scholz’s visit will provide some indication of what Germany hopes to do next in developing relations between the two countries.
In addition to oil, Kazakh gas reserves exceed 2 trillion cubic meters, according to Kazakh government data.
Eduard Kinsbrunner, Central Asia director for the East German Business Association, said that as many German companies have closed operations in Russia – historically the main hub for Central Asia – they have expanded their presence throughout the region with regional sales offices and operations.
Ginsbrenner said the German group is negotiating contracts in other sectors including chemicals, skilled labour, renewable energy, logistics and education.
Several of those contracts are expected to be signed during Scholz’s visit, he said.
Hydrogen hopes
Kazakhstan is seven times larger than Germany and has space for energy projects and solar and wind power.
Germany-based SVEVIND Energy Group is developing one of the world’s largest green hydrogen projects in Mangystau in the southwestern region of Kazakhstan, with a planned renewable energy capacity of 40 GW.
German President Steinmeier visited here last June.
Germany’s new efforts are already showing up in the numbers.
In 2023, Kazakhstan exported 8.5 million tons of oil to Germany, representing 11.7% of Germany’s total oil imports, up from around 6.5 million tons before the Ukrainian war.
With the surge, Kazakhstan has become Germany’s third-largest supplier after Norway and the United States, according to Germany’s Federal Statistical Office.
German investments in Kazakhstan increased by 64% in 2022 compared to last year, according to the state-run Kazakh Investment Agency.
“Central Asia was not a top priority for Germany for reasons of governance and political order,” said Stephan Meister, a Central Asia expert at the German Council on Foreign Relations. But the war fundamentally changed that dynamic.
According to data from the East German Business Association, trade volumes between Kazakhstan and Germany have nearly doubled since Russia invaded Ukraine in February 2022, with turnover increasing by 89.5% in 2022 compared to the previous year.
“Looking to the future”
“When we look to the future, we see enormous possibilities,” a German government official said ahead of the visit.
“We will need natural gas in the next two decades. Tenders for new natural gas power plants in Germany are currently in the final stages, and all of these power plants will be ready to run on hydrogen. This means they need to get the gas from somewhere.”
There are still ancient historical and geographical realities behind all new plans.
Kazakhstan could be Russia’s alternative to Germany. But it also suffers from an outdated Soviet-era grid and complicated red tape.
“If the widespread expansion of renewable energy is complicated in Germany, it is even more so in a country like Kazakhstan,” said Thomas O’Donnell, an energy expert at the Freie Universität Berlin.
Russia still has significant influence in Kazakhstan, which has refrained from taking sides in the war in Ukraine. Most importantly, the Druzhba pipeline carrying Kazakh oil to Berlin passes through Russia.
Therefore some kind of relationship with Russia will continue.
“On the one hand we support Ukraine. On the other hand, our companies still need resources,” said Meister, of the German Council on Foreign Relations.
