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Turkmen Gas Exports To Iran A Boon For Both Countries

Turkmen President Gurbanguly Berdymukhammedov (right) welcomes his Iranian counterpart Mahmud Ahmadinejad to Ashgabat, ahead of the opening of the new gas pipeline connecting their countries.
Turkmen President Gurbanguly Berdymukhammedov (right) welcomes his Iranian counterpart Mahmud Ahmadinejad to Ashgabat, ahead of the opening of the new gas pipeline connecting their countries.
By Bruce Pannier
Turkmenistan and Iran have opened a new natural-gas pipeline to much fanfare, but considering its relatively modest capacity, the ribbon-cutting ceremony might have more political significance than anything.

Iranian President Mahmud Ahmadinejad arrived in the Turkmen capital on January 5 on the second leg of a Central Asian tour that began in Tajikistan and focused on regional and economic cooperation.

Ahmadinejad picked up where he left off in Ashgabat, where he was expected to travel last week until an ongoing political crisis at home forced a delay.

After a warm welcome from Turkmen President Gurbanguly Berdymukhammedov, the two leaders retreated for private talks that were expected to result in agreements furthering bilateral cooperation.

The icing on the cake, however, is the opening today of the Dovletabat-Sarakhs-Khangiran pipeline, which comes at an opportune moment for both countries and which Ahmadinejad hailed as an opportunity to strengthen ties.

The pipeline, when fully operational, will more than double Turkmen gas exports to Iran -- from 8 billion cubic meters (bcm) annually to 20 bcm -- while furthering Ashgabat's efforts to lessen its dependence on Russian-operated export routes.

For Iran, the new gas supplies will alleviate gas shortages in its northern regions, while showcasing its value as a trade partner in the Caspian region at a time when its reputation is under question.

Iran boasts the second-largest gas reserves in the world, but its dependence on gas for half of its energy needs opens the way for trade with Turkmenistan, which has the world's fourth-largest reserves.

The importance of maintaining good trade relations with Ashgabat was exposed in early 2008, when a brief spat over prices led to a halt of Turkmen gas imports and left large areas of northern Iran without heat and electricity during an especially harsh cold spell.

Finding Export Markets

When the Soviet Union collapsed in 1991, all Turkmen gas was exported via Russian pipelines until the 200-kilometer Korpeje-Kordkuy pipeline connecting Turkmenistan and Iran opened in late 1997.

That pipeline has a capacity of 8 bcm but has rarely pumped more than 6.8 bcm, leaving Turkmenistan largely dependent on Russian pipelines until a new Turkmenistan-China pipeline (capacity 40 bcm) was opened last month.

When 2009 started, Turkmenistan had contracts to sell 50-60 bcm of gas to Russia (it only amounted to a bit more than 11 bcm due to an April explosion that closed the pipeline to Russia) and 8 bcm to Iran annually. Russian-Turkmen bickering over the price for Turkmen gas and responsibility for the pipeline explosion finally ended last month when the two countries' presidents met in Ashgabat. But the new contract calls for 30 bcm of Turkmen gas, not 50 bcm.

Nader Devlet, a professor of international relations at Istanbul Trade University, tells RFE/RL's Turkmen Service the launch of the new pipeline to Iran is well-timed, since it demonstrates Turkmen gas can be exported in different directions.

"This is a very good opportunity for Turkmenistan to acquire an alternative route for its gas exports at a time of misunderstanding with Russia," Devlet says.

With the opening of the Dovletabat-Sarakhs-Khangiran pipeline, Turkmenistan starts 2010 with contracts to sell some 40 bcm to China, 30 bcm to Russia, and at least 14 bcm to Iran.

And Turkmenistan is partially compensated for the reduction in exports to Russia by the new exports to Iran. The gas for the new pipeline to Iran comes from the same field, Dovletabad, that Turkmenistan has been using to supply Russia.

Iran's Regional Influence

Tehran, meanwhile, faces the prospect of additional international sanctions as a result of its defiance over its nuclear program.

Aside from demonstrating Tehran's worth as a trade partner, it also highlights Tehran's policy influence in an energy-rich Caspian region where it has good ties, including an oil-swap program with Kazakhstan.

Devlet says the new pipeline shows Iran is still able to "improve its relations with its neighbors."

Iranian-Turkmen cooperation could prove to have influence beyond the region as well. Iranian media reported in August and September that new deals with Ankara would include shipping Turkmen gas to Turkey via Iran.  Turkish Energy Minister Taner Yildiz will be at the launch ceremony in Turkmenistan.

Iranian media claimed at the time that up to 35 bcm of Turkmen gas would be sold to Turkey via Iran despite the fact there is presently no pipeline network capable of delivering such volumes.

The projected Nabucco pipeline has a spur going to Iran.
Supporters of the European Union-backed Nabucco gas pipeline surely took notice of the report, since Turkmenistan has been courted as a source of gas for Nabucco.

The current political situation has prevented Nabucco shareholders and EU officials from directly approaching Tehran about the construction of a branch of the pipeline through Iran, although that route is the easiest way (and the Nabucco website shows the pipeline connecting at both the Turkish-Georgian and Turkish-Iranian borders).

Nabucco aims to carry some 31 bcm of gas from the Middle East and the Caspian Basin to the heart of Europe, but lack of an Iranian spur would require the construction of a pipeline along the Caspian Sea bottom from Turkmenistan (or Kazakhstan) to Azerbaijan, then across the Caucasus to the Georgian-Turkish border.

Russia and Iran, two of the five Caspian littoral states, have already made clear they will oppose construction of such a pipeline for environmental reasons, guaranteeing a legal battle that could last for years.

Following Iranian media claims that Tehran intends to pipe Turkmen gas abroad, Turkmenistan's government has said it does not want its gas reexported, and has increasingly been in contact with Nabucco officials.

New Trade Route

Another new export route that is part of President Ahmadinejad's visit to Turkmenistan is the North-South railroad. The new railway line will connect Kazakhstan to Iran's Persian Gulf ports, with stops in Turkmenistan along the way.

An earlier, albeit more modest, attempt at such a railway -- the Sarakhs-Meshhed -- has helped boost trade but has not proven to be the "junction of the world" that former Turkmen President Saparmurat Niyazov said it would be when the line opened in 1995.

When President Berdymukhammedov attended a ceremony starting construction of the North-South line in December 2007, he said it would provide more than a dozen countries with convenient access to the Persian Gulf and European markets.

With proper railway connections in place, Iran would stand to increase trade with Russia and China, two permanent UN Security Council members that, unlike most Western states, are still doing business with Iran. A new trade route in the heart of the Eurasian continent could mitigate the effect of international sanctions on Iran.

RFE/RL's Turkmen Service contributed to this report
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Comment Sorting
Comments
     
by: Johann from: USA
January 06, 2010 12:57
Turkmenistan is obviously going from the Soviet ( Russia's ) sphere of interest to the Iranian one. They are Muslims like they in Iran !!
Putin has a problem. He is even not on a friendly terms with Russia's former closest ally, or Belarus.
Live is diplomacy, so are successful politics.

by: Bahram from: Toronto
January 06, 2010 14:24
I disagree that the Iranian diplomacy is merely based on religion and that geopolitics of the Caspian region is way more complex than to be simplified as religous camps.

by: Zoltan from: Hungary
January 06, 2010 18:09
I share the view of Bahram that Iran has a very much pragmatist rather than ideologist diplomacy.

If Iran would choose its friends on cultural or religious basis than they would be surely not friends with Russia repressing Muslim minority in North-Caucasus.
(which is a former spehre of influence of Persia. The city of Derbent on the shores of the Caspian has much more to do with Persian history than with the woods and ancient Slavic lumberjacks around Moscow...)

Anyway Iran has a natural interest in Central-Asia. As that region was always under Persian influence until Russians have come. In the oasis towns of Khiva, Urgench Bukhara or Samarkand city dwellers speak Persian (Tajik) rather than Turkish the language of the nomads.

If someone have been to Uzbekistan and Iran as well he could have seen the cultural similarities. As the Iranian city of Isfahan and Samarkand of Uzbekistan is almost identical.

I strongly support the advancement of Iran in Central-Asia. As they are natural allies.

by: ZviadKavteli from: Jackson, MI, USA
January 07, 2010 03:41
If Iran is smart and works with the West, the world will have a double benefit:
1. Iranian people would benefit from cooperation with the rest of the world
2. Russia's leverage to blackmail the world would diminish.

Russia would not be able to blackmail the West
with disruption of gas supplies
and
with providing semisophisticated weapons to Iran.

I do hope that Iran becomes reasonable and gains from cooperation with the West.

by: Ivo
January 07, 2010 11:05
I think it's the West (that is Europe minus the USA) that should be smarter and work with Iran. Leave the anti-Iranian hatred and old grudges to the USA.

Did you see the list of countries the US considers sponsors of terrorism and whose nationals the US considers dangerous? It includes Cuba and Iran amongst Afghanistan, Algeria, Iraq, Lebanon, Libya, Nigeria, Pakistan, Saudi Arabia, Somalia and Yemen.

When was the last time Cubans or Iranians blew up or threated to blow up a plane?!!?

by: Ali from: USA
January 07, 2010 21:26
Turkmenistan's energy policies are the least politicized in Central Asia. The country is ready and engaging in a pragmatic energy partnership with any potential trade partner both in and out of the region. It's energy policies has nothing to do with being a Muslim country or being neighbors with a Muslim country. However, countries like Russia still cannot fully accept the fact that Turkmenistan no longer belongs to it and that the country can make its own decisions even if it is still under some influence of Russia. Turkmenistan's past president must be given a big merit for getting the country an official status of Neutrality that helps a lot in making its foreign policies.

by: Greg Somerville from: New York City
January 10, 2010 17:39
The comments here are remarkably perceptive and optimistic, and I would like to add one in the same vein: if the US could find a way to cooperate further with Iran, there are existing road routes overland through Iran (from Bandar e Abbas or from Jask) toward Zahedan and from there into Afghanistan, which would save more than half the distance now traveled by the new Northern Distribution Network, and the long-planned North-South railway within Iran could also play a part in this. Such Iranian routes could be used for coalition resupply in Afghanistan -- a goal which Iran has no national interest in opposing -- and to carry trade from India, for example, which Pakistan currently blocks as a matter of rivalry and paranoia. Indian trade goods are not permitted to offload at Karachi...I wonder how many Americans are aware of this self-defeating intransigence by our Pakistani allies. Iran also has a direct interest in helping to protect Hazara and other Shiite communities within Afghanistan from prejudice and the ill-treatment which heightened sectarianism brings. We are exposing ourselves to needless risk and needless complicity by depending for Afghan resupply on a whole raft of Central Asian and post-Soviet dictators. Economic cooperation with Iran, instead of sanctions, would win exactly those hearts and minds (and stomachs) upon which Iranian hopes for democracy depend. Instead, we are pouring American resources into drug-implicated and kleptocratic regimes, including the Kremlin, whose oil and gas exports continue to dominate a Russian economy hopelessly skewed toward short-term profit to line the pockets of Putin's clique. None of this makes sense, especially for a nation like ours who could stand up for democratic advance far more vigorously if we were not in bed with so many leftover dictators (including Hu Jintao).

by: Johann from: not USA
January 25, 2010 16:25
To Johann from USA who says "They are Muslims like they in Iran" -- a very shrewd observation. But they are Shiia Muslims in Iran and Sunni Muslims in Turkmenistan (and the rest of Central Asia). Don´t shrug it off, darling, if it did not matter, the Iraq conflict would have looked much more different, too. Oh, and if you still think it´s the same stuff, the difference is roughly like between Catholics and Protestants: most of the time they manage to stay off each other´s throuats, but then again there is Northern Ireland...

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