Accessibility links

Breaking News

Qishloq Ovozi

A gas-processing plant at Galkynysh gas field in Turkmenistan (file photo)

Turkmenistan has the fourth-largest reserves of natural gas in the world and during the last nearly quarter of a century has never been able to sell more than a fraction of this hydrocarbon wealth. In fact, Turkmenistan is losing the few customers it does have.

Russia's recent announcement to suspend the South Stream gas pipeline project leaves Europe short 63 billion cubic meters (bcm) of gas it expected to have just a few years from now. It opens new possibilities for the European Union's Southern Gas Corridor project and the EU hopes Turkmen gas will be a key supplier to the project.

So as Turkmenistan mulls a future with potentially only one customer for its gas, the Turkmen government is pursuing the realization of two old pipeline projects that could take large volumes of Turkmen gas to huge markets. But each of these projects has its unique challenges.

RFE/RL's Turkmen Service, known locally as Azatlyk, conducted a roundtable (audio below) to discuss Turkmenistan's current situation, whether the recent decision to suspend Russia's proposed South Stream gas pipeline could mean Turkmen gas would finally reach Europe, and what other options Turkmenistan has to prevent becoming dependent on China as its sole gas customer.

Azatlyk director Muhammad Tahir moderated a discussion on that topic. Participating on the panel were Dr. Luca Anceschi, lecturer at the Central Asia Studies Department at the University of Glasgow and author of many articles on Central Asia, including the recent "Turkmenistan's Neutrality in Post-Crimea Eurasia"; Salihe Kaya, researcher at the Foundation for Political, Economic, and Social Research in Ankara and co-author of "Energy Supply Security and the Southern Gas Corridor"; and I simply had to say a few things also.

Anceschi summed up the situation succinctly by saying, "At the moment the geopolitics of Eurasia gas is going through a time of extreme fluidity..."

Western sanctions on Russia, the European Union's largest supplier of gas, have sent EU officials scurrying to identify new gas suppliers. Some have criticized the EU in the past for articulating the Southern Gas Corridor policy, then doing little to push the idea forward. There appears to be more political will in the EU now to see progress on connecting Caspian Basin energy resources to Europe.

Azerbaijan is already pledged as a gas supplier to the EU and, once built, in 2018, the Trans-Adriatic Pipeline (TAP) will carry Azerbaijani gas from the Turkish border through Greece and Albania, and across the Adriatic to Italy. That would only be some 20 bcm when fully operational, so more pipelines and more gas are still needed.

Kaya pointed out, "Turkmenistan appears willing to play a key actor of natural gas resources. The European countries want to reduce their dependence on Russian gas of course, and Turkmenistan wants to export gas to European countries."

With Iran out of the formula due to international sanctions on the Islamic Republic, bringing gas from Turkmenistan to Europe requires construction of the Trans-Caspian pipeline to connect Turkmenistan to Azerbaijan.

The idea has been around since the mid-1990s. Azatlyk contacted Sabit Bagirov, the former president of the State Oil Company of the Azerbaijan Republic (SOCAR), after the announcement of the suspension of South Stream. Bagirov said that cancellation of the Russian project was a "huge" opportunity for building the Trans-Caspian pipeline.

But Anceschi noted that the unclear legal status of the Caspian Sea remains, as it has for more than two decades, a major hurdle to building the Trans-Caspian. The five littoral states have not been able to agree on whether the Caspian should be designated a sea or a lake. It makes a great difference in how the Caspian's resources, and profits, are divided.

Two of the Caspian littoral states -- Russia and Iran -- object to the pipeline's construction until the sea's legal status is agreed upon by all five littoral states (Kazakhstan being the fifth). Moscow and Tehran have also raised environmental concerns in their objection to the pipeline plan.

Bagirov said these objections were not valid since the pipeline would run along the parts of the Caspian that belong to Azerbaijan and Turkmenistan, and he mentioned Russia has already built a pipeline across the Black Sea (Blue Stream) to Turkey under much more challenging conditions than those in the Caspian Sea and so far without any environmental problems.

Concerning Russian and Iranian opposition to the Trans-Caspian, Kaya said that "there are no rules about this, there's just policy."

Anceschi drew attention to visits during the past month by European leaders to Central Asian Caspian states -- Italian Prime Minister Matteo Renzi to Turkmenistan and Czech Prime Minister Milos Zeman and French President Francois Hollande to Kazakhstan -- as a possible signal Europe in launching its offensive to get commitments from Turkmenistan and Kazakhstan to supply the Southern Corridor.

Kaya said Turkey has already shown its interest as a transit country for Central Asian energy supplies. The Trans-Anatolian Pipeline (TANAP) will connect Azerbaijan to the TAP pipeline. And Ankara, which stands to benefit from transit fees, has voiced support for the Trans-Caspian pipeline.

Of course, that was before Russian President Vladimir Putin's visit to Ankara at the start of December.

Turkmenistan's other option is the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. The advantage TAPI has is that all the governments involved are pushing to see it realized and construction is tentatively due to start next year. And as Anceschi pointed out, "there have been a number of discussions about the actual establishment of the consortium, there is some agreement on the route and there is also a fairly stable agreement on the pricing procedure and on the payment procedure...."

The biggest obstacle to TAPI is of course the security situation in Afghanistan (the pipeline is due to pass near Kandahar, for example) and in Pakistan's Baluchistan region.

The panelists agreed for TAPI to be built deals would have to be made with local leaders, in some cases warlords, and such agreements are tenuous at best.

However, Turkmenistan's need to find a new export route for its gas is becoming critical. Russia is facing a glut of gas due to reduced purchases in Europe and has recently canceled its contracts for importing Central Asian gas. Turkmen gas exports to Russia were greatly reduced in recent years, down from a high of 45-50 bcm to 11 bcm, but still enough to bring several billion dollars in sales.

Turkmenistan's sales to Iran, never even 8 bcm, are in danger after Tehran signaled earlier this year that its expanding internal pipeline network and increased domestic production would mitigate the need to import gas from its neighbor in the near future.

That leaves Turkmenistan with only China as a buyer. China has agreed to purchase some 65 bcm of gas annually, a sizable amount. But the China-Turkmen gas deal is extremely opaque. Such reports as there have been cite figures of $250 per 1,000 cubic meters down to $195, the latter representing roughly half of current world market prices. And since gas prices follows oil with a lag of some three to six months, gas prices should drop by one-third in the first quarter of 2015.

please wait

No media source currently available

0:00 0:43:13 0:00
Direct link

-- Bruce Pannier

Follow Dr. Luca Anceschi: @anceschistan

Salihe Kaya: @salihekaya

Muhammad Tahir: @tahirmuh

Azatlyk: @azathabar

It didn't matter to residents what the "doctors" were saying.

School was in session on November 28 in the northwestern Kazakh village of Berezovka when "almost simultaneously" 19 children between the ages of 10 and 15 and three teachers "lost consciousness." Ambulances came. The medics knew the symptoms. They had been picking up people the day before for the same reason.

Officials initially treated the incident as a mystery, and later offered questionable reasons for what they admitted seemed to be some sort of poisoning.

The approximately 1,400 residents of Berezovka had no doubt about the cause. They had been complaining for years about the nearby oil field.

By the evening of November 28, there were 31 people being treated for the "mystery" illness. On December 4, ambulances were called to take away six more schoolchildren for medical treatment; one of those children was going for the second time in a week.

Officials initially said three causes were possible: food poisoning; a leak in one of the still-ubiquitous gas canisters in use across the former Soviet Union; or it could have something to do with processing facilities at the Karachaganak oil and gas field several kilometers away.

On November 29, the provincial administration's press service said "doctors," whose names weren't given, reported four children were still under observation; one had anemia and another epilepsy.

It didn't matter to residents what the "doctors" were saying. RFE/RL's Kazakh Service, known locally as Azattyq, reported that people in Berezovka collected signatures demanding resettlement. They handed over the petition to officials on December 9. This is the fourth time residents have petitioned authorities for resettlement.

On December 4, the same day the last group of six ill children was picked up at school by ambulances, the prosecutor for West Kazakhstan Province, Serik Karamanov, said, "It has been established that at 14:19 on November 27 at the gas-processing complex of KPO B.V. [Karachaganak Petroleum Operating], there occurred a discharge of condensate for a period of two minutes," some 8.5 kilometers from Berezovka.

The prosecutor's office sent a request to the proper authorities to obtain information about the level of illness and mortality of residents of the Berezovka area in the past 10 years.

Such information is not difficult to find. A local organization called Zhasil Dala (Green Steppe) has been collecting this sort of information for years. Zhasil Dala has also led several campaigns demanding the government resettle Berezovka residents.

There is also the Washington-based NGO Crude Accountability (CA), which has been following the situation in Berezovka for more than a decade. CA filed a complaint on behalf of Berezovka residents in 2004, claiming the Karachaganak field was affecting the health of the villagers.

In August 2013, CA posted a 38-minute video titled "Five Kilometers Of Indifference":

"Five kilometers" refers to the "safe" distance that inhabited areas need to be from oil and gas fields. The film looked at life in Berezovka; the kind of toxins released into the air, ground, and water; local efforts to convince officials to help; and the relationship the people of Berezovka have with officials from the government and the consortium running Karachaganak.

The CA film notes that the NGO prepared independent reports about the health hazards in Berezovka and handed them over to the Kazakh government and KPO. According to CA, the reports were eventually rejected because the methodologies used for the research were not accredited in Kazakhstan.

The government and KPO funded their own report, which cleared Berezovka of having any adverse effects due to the Karachaganak field. In 2012, KPO installed towers to monitor air quality and provide early warning to Berezovka residents in case of an accident at the field.

Provincial prosecutor Karamanov said one of the two stations for environmental monitoring for Berezovka was turned off for repairs when the November 27 toxic discharge occurred.

The Karachaganak field is important for Kazakhstan, especially in light of the most recent delay at the Kashagan oil field in Kazakhstan's sector of the Caspian Sea.

Karachaganak is a major field. It contains more than 1.2 billion tons of oil condensate and more than 1.3 trillion cubic meters of gas. The gas in particular is a potential health hazard, as it contains far-higher-than-normal amounts of hydrogen sulfide, which acts as a nerve agent and can cause respiratory failure.

The partners in the consortium are BG Group and Italy's Eni, each with a 29.25 percent stake; U.S. company Chevron with an 18 percent stake; Russia's LUKoil with a 13 percent stake; and Kazakhstan's KazMunaiGaz (KMG) with a 10 percent stake. They have a contract for the field that runs through 2038.

KMG picked up its shares in Karachaganak fairly recently, acquiring its stake in late 2011 after what some regarded as strong-arm tactics. Kazakhstan had no presence in the lucrative project, admittedly due to unfavorable contracts Kazakh officials signed at the end of the 1990s. KMG gained its shares after Kazakh authorities launched investigations into KPO's finances and environmental practices that could have seen the consortium pay out hundreds of millions of dollars in fines.

The environmental fines stemmed from several years of complaints over practices for sulfur storage and disposal. The people of Berezovka say the sulfourous smell of rotten eggs is near constant in the village.

The cases against KPO were dropped and instead, KMG -- and by extension the Kazakh government -- received the shares they wanted in Karachaganak.

In the film "Five Miles Of Indifference," Svetlana Anosova, a resident of Berezovka, a member of Zhasil Dala, and someone familiar with the village's health problems, says, "We drink contaminated water, breathe contaminated air, and eat contaminated food."

-- Bruce Pannier, based partially on material from Azattyq correspondent Sanat Urnaliev and with help from Azattyq director Torokul Doorov (@Torokul)

Follow Azattyq in Kazakh: @AzattyqRadiosy or in Russian: @Radio_azattyq

Load more

About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change.

Bruce Pannier
Bruce Pannier

Content draws on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad.

The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.