Wednesday, April 16, 2014


Turkmenistan

Turkmenistan: 'Gas-Rich' Residents Shiver In The Cold

A child wrapped up against the cold in Ashgabat.
A child wrapped up against the cold in Ashgabat.
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By Bruce Pannier
Turkmen authorities have long boasted about the country's vast gas reserves, exports of which are expected to at least double in coming years as new pipelines are completed to improve links to China and Russia. Natural gas is a cornerstone of Turkmen foreign policy -- a fact highlighted this week when Ashgabat cut its gas flows to Iran: officially because of technical problems, although a price dispute appeared as likely a culprit.

Indeed, the former Soviet republic, once seen as one of the world's most closed societies, has so much gas that officials proudly boast that citizens use it for heating and cooking -- free of charge. Water, electricity, and gas have been free, government-provided staples since the country's 1991 independence. The late President Saparmurat Niyazov instituted the policy and his successor, Gurbanguly Berdymukhammedov, has vowed to continue it.


But people in rural areas, where two-thirds of the country's 5 million people live, paint a different, and colder, picture -- one that suggests Turkmenistan's growing export obligations are affecting domestic consumption.


Blaming The Public


A correspondent for RFE/RL's Turkmen Service in eastern Turkmenistan says that as the Central Asian winter has set in, rural inhabitants have begun experiencing huge problems with gas supplies. The correspondent says that while the urban population appears to have enough gas, pressure is falling in the homes of rural residents.


A homemaker in the Lebap village of Arab says she and her family have never had gas since moving there in 1993. "Our neighbors and I are not able to pay for the pipeline to be built to our neighborhood," says the woman, in her 30s. "Some families used small pipes to connect their homes to the pipeline, but now [authorities] don't care about providing access to gas. We don't know what to do."


Residents in rural areas outside Ashgabat tell RFE/RL correspondent Soltan Achylova that employees from the state gas company appear to have their own interpretation of the free-gas policy. Locals say that representatives of the gas supplier tell them that households frequently consume more than their allotment and that the utility company is thus forced to lower pressure in the pipelines or even cut off supplies completely "from time to time" to help them stick to yearly limits. They claim that such explanations are often accompanied by solicitations for bribes to keep the gas flowing.


Achylova reports having had representatives of the gas company visit her home to pressure her for money. She refused, instead going to the company offices to complain; the company responded by telling her that gas is no longer entirely free and that she will be charged for anything more than one stove burner or one radiator for heating.


"I said if I need to pay, tell me how much and I will pay here, please do not ever send anyone to my home," Achylova says. "After that, no one has come to my home. I think people do not understand or do not demand their rights."


Achylova says she wonders whether "the Turkmen authorities are taking advantage of people's ignorance in order to collect money" and questions whether such payments end up "in the state coffers."


Growing List Of International Customers


Turkmenistan is clearly concerned with those coffers, even as ordinary citizens struggle to get enough gas to heat their homes and cook their food.


After Ashgabat blamed technical problems for a temporary cut in gas exports to neighboring Iran, both Turkmen and Iranian authorities this week insisted the interruption was unrelated to price. But a look at Turkmenistan's growing list of gas clients suggests that price concerns might have been behind the move, which also affected Iranian gas exports to Turkey.


Turkmenistan currently has two gas-export pipelines -- one from the Soviet-era connecting it with Russia, and another built some 10 years ago that links it with Iran.


Iran currently imports some 8 billion cubic meters of Turkmen gas annually at a rate of $75 per 1,000 cubic meters. That's half of what Russia's powerful Gazprom is slated to pay. Under a new 30-year contract beginning later this year, Turkmenistan will sell up to 50 billion cubic meters of gas annually to Gazprom for $150 million per 1,000 cubic meters.


"Without a doubt, what has happened recently is a demonstration of Ashgabat's desire to increase the price it gets [from Iran] for gas," says Moscow-based political analyst Artem Ulunyan.


Meanwhile, Turkmenistan has also signed a new pipeline deal with Kazakhstan and Russia to build a pipeline along the northeastern shore of the Caspian Sea to eventually supply markets in Europe. That pipeline, with a capacity of at least 20 billion cubic meters annually, is expected to be ready by 2010 and it's a good bet that Ashgabat will fetch market price for its gas that at least matches what Gazprom is set to pay.


Turkmenistan also has a deal to begin exporting to China some 30 billion cubic meters of gas annually via a pipeline that should be ready by the end of 2009. The original agreement called for a price of $80 per 1,000 cubic meters.


But Ulunyan says Berdymukhammedov, seeing world gas prices, might realize the deal with Iran is simply outdated. "It is no secret that those contracts made during the time of Niyazov cannot be considered advantageous for Turkmenistan,” Ulunyan says. "So that means that probably now the talk is about reviewing the price for Turkmen gas."


Whether Ashgabat will demand more money from Iran remains to be seen. Tehran does have a bargaining chip, since it was mainly Iranian money and labor that built the pipeline connecting it with Turkmenistan.


Many Turkmen citizens, however, are more concerned about having enough gas for cooking and heating than for exporting to Iran -- or anywhere else.
 
"It's difficult for housewives," says the homemaker in the village of Arab. "Since September, we have used an open fire for cooking. There's no way to use an alternative cooker with electricity. The power is too low."


(RFE/RL Turkmen Service's Osman Halliyev contributed from Lebap Province and Soltan Achylova contributed from Ashgabat)

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