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Analysis: U.S. irked by Turkmen gas policy

disclaimer: image is for illustration purposes only
by John C.K. Daly
Washington (UPI) Nov 23, 2007
Since the death last December of Turkmen President Saparmurat Niyazov, interested diplomats and energy company executives from around the world have jetted into dusty Ashgabat airport for meetings with Niyazov's successor, Gurbanguly Berdymukhamedov.

The United States has strived to make up for lost time, according to one State Department official, sending 16 high-level delegations for meetings and conferences; at the time of Niyazov's death, Washington did not even have a fully accredited ambassador in the country.

All the goodwill so carefully built up, however, may now be at risk by Washington's insistence on linking its interest in Turkmen energy exports to its policy of containing Iran. Speaking at the 12th annual Turkmenistan International Oil and Gas Exhibition, U.S. Energy Secretary Samuel Bodman complimented the hosts and attendees at the exhibition, offering U.S. assistance to develop Turkmenistan's hydrocarbon potential. At a subsequent news conference, however, Bodman cut to the chase: "The U.S.A. is confident that Iran is trying to develop its own nuclear weapons. żż We are trying to do our utmost to make Tehran stop developing nuclear weapons."

And then Bodman presumed to caution the Turkmen government about its options on export routes, saying, "We will not be happy if this (Trans-Iranian gas pipeline) project is implemented."

Berdymukhamedov's government might well answer: "So what?"

More than 150 companies from 21 countries, including 62 companies from Russia, participated in the three-day exhibition. Only six U.S. companies were in attendance, but they included such heavyweights as Chevron and Shell.

Speaking at the conference, Turkmen Oil Minister Baymurad Hojamuhamedov noted that in 2007 Turkmenistan plans to increase annual natural gas extraction to 70 billion cubic meters, of which 49 cu m to 50 cu m will be exported. What really caught the delegates' attention, however, was Hojamuhamedov's discussion of the government's ambitious plans to develop the country's oil and gas sector, seeking by 2030 to increase oil and gas condensate output to 110 million tons and natural gas to 250 billion cu m.

Turkmenistan's oil and gas industry is entertaining suitors from the four points of the compass, and while its export options are largely limited to the Central Asia-Center natural gas pipeline northern route through Russia and the southern Korpezhe-Kurt Kui pipeline to Iran, Ashgabat is considering all other possibilities, which Bodman's ill-timed comments seem designed to influence.

A 25-year agreement between Russia and Turkmenistan, signed in April 2003, forms the basis of Russian-Turkmen cooperation in the gas sector. In announcing the reconstruction of the Central Asia-Center gas pipeline, scheduled for completion by 2011, Gazprom Deputy Chief Executive Officer Valery Golubev said, "The main aspects of our work are the purchase and export of gas to Europe. Turkmenistan provides 63.7 percent of (Gazprom's) gas bought in Central Asia," with 2007 purchases totaling about 67 billion cu m of gas.

The Central Asia-Center pipeline, built in 1974, carries Kazakh, Turkmen and Uzbek gas through Kazakhstan to Russia and has become increasingly important to Gazprom, which has a near-monopoly on Central Asian natural gas exports. Gazprom is attempting to lock in future purchases of Central Asian gas to offset its declining output in Russian West Siberian gas fields. When the pipeline's renovation is complete, its carrying capacity will double from its current rate of 45 billion cu m to 52 billion cu m annually to 75 billion cu m to 90 billion cu m in 2010 and eventually to 100 billion cu m.

While Russia monopolizes the bulk of Turkmen gas imports, in December 1997 Turkmenistan inaugurated the $190 million, 124-mile Korpezhe-Kurt Kui pipeline to Iran, the first natural gas export pipeline in Central Asia to bypass Russia. While the pipeline has a potential carrying capacity of 8.4 billion cu m, in 2006 the pipeline carried 4.5 billion cu m.

A further factor is the May 12 joint declaration on the development of the gas pipeline network in Central Asia, signed by the Russian, Kazakh, Uzbek and Turkmen presidents, which includes a pipeline skirting the Caspian shoreline currently pumping more than 5 million cu m of gas daily.

In contrast, the Bush administration has been promoting an undersea east-west subsea Caspian pipeline, which would link up in Baku to Western-directed pipeline facilities, avoiding both Russian and Iranian territory.

Quite aside from the fact that Russia and Iran are Turkmenistan's two sole export markets, the proposed Bush administration pipeline initiative is unlikely to succeed as long as the five Caspian states have yet to decide definitively how to divide the seabed.

Bodman's rhetoric is in stark contrast to Moscow's and Iran's dealings with Turkmenistan, which are devoid of ideological content, focused as they are on economic issues. Under Niyazov's leadership, Turkmenistan pursued avowedly neutralist foreign policy; it seems unlikely that less than 12 months after his death that the Berdymukhamedov administration will risk alienating its two best-paying customers to placate Washington conservatives, especially as any future American financial payoff for the country's energy reserves would be years away.

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