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Turkmenistan: President Signals New Gas Export Strategy

By Lowell Bezanis

Washington, 27 April 1998 (RFE/RL) -- Turkmen President Saparmurat Niyazov used his first official visit to Washington as an opportunity to signal a new departure in his country's natural gas export strategy.

Energy experts say the deal he signed Thursday with the U.S. to study the feasibility of an East-West Transcaspian pipeline points to a more assertive approach to getting Turkmenistan's gas to market. They contend Niyazov has effectively given Russia and Iran notice and thrown Turkmenistan's weight behind U.S.-supported Caspian energy export plans.

One of the biggest foreign investors in Turkmenistan says Ashgabat's interest in the U.S. sponsored project is part of a larger shift.

Yosef Maiman is president of the Israeli Merhav corporation based in Tel Aviv, which has invested $1.3 billion in Turkmenistan's economy.

He said at a Washington conference earlier this week that traditionally, Ashgabat let consumer countries decide gas export issues, but "after seven years, Turkmenistan is no longer waiting."

Maiman said Turkmenistan became frustrated by U.S. sanctions against Iran that made it difficult to export to western markets through that country. And on the other side, there was Russia which did not want to pay market prices for Turkmen gas.

"Turkmenistan is taking a courageous step," Maiman said, noting that Ashgabat's new-found interest in the underwater gas pipeline across the Caspian to Azerbaijan, and onwards through Georgia to the Turkish market, "creates a new geopolitical configuration."

He said it leaves Niyazov "open to heavy political pressure from Russia in the north and Iran in the south."

Maimov speculated that Turkmenistan's interest in avoiding Iran and Russia, encouraged by the United States, may force Russians to rethink their policy toward Turkmen gas exports and oblige them "to let more gas out."

Since last March, no Turkmen gas has been exported through the Russian pipeline system because of the disagreement on pricing.

Russia and Iran have made clear their firm opposition to the U.S.-sponsored Transcaspian pipeline project.

A delegation from Moscow in Ashgabat recently said Russia opposed the proposal on ecological grounds and said it could not go ahead until the status of the Caspian Sea was resolved.

Iranian Foreign Minister Kamal Kharazi has also branded the scheme, in his words "a violation of the rights of {Caspian} littoral states."

Until Niyazov's visit to Washington, Turkmenistan itself was cool toward the Transcaspian pipeline project.

As recently as last month at a ministerial level meeting in Istanbul, Turkmenistan's diplomats scoffed at the project, citing its high cost -- an estimated $2.8 billion -- and technical difficulties of construction.

Ashgabat's change of heart seems to have come about under US pressure and the prospect of American financial support for the project, in addition to frustration with existing export bottlenecks.

U.S. officials have repeatedly urged Turkmenistan to abandon its efforts to export gas via Iran and instead join forces with Kazakstan and Azerbaijan in developing an East-West energy and transport corridor via Georgia to Turkey.

Washington has now added a material incentive with the US pledge to Turkmenistan to expand export financing and to fund the transcaspian feasibility study with $750,000.

However, as Maiman and others at the conference pointed out, prospects for an East-West Energy and Transport Corridor do not depend only on the US or Turkmenistan.

They said close ties between Turkmenistan, Kazakstan, Azerbaijan, Georgia and Turkey are essential for its success.

But at present, territorial delimitation issues continue to mar relations between Ashgabat and Baku, as well as Ashgabat and the Kazak capital Aqmola.

In addition, Maiman stressed that the venture's success requires the backing of major US, European and Japanese commercial concerns and most importantly, a "US commitment to phase down Russia."