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Kazakhstan/Turkmenistan: Presidents Agree On Gas And Oil Exports To China, Japan

By Naz Nazar, Edige Magauin and Bruce Pannier

Prague, 12 April 1999 (RFE/RL) -- Kazakhstan's President Nursultan Nazarbayev arrived in Turkmen capital Ashgabat Thursday (April 8) with a dual purpose -- to participate in a summit of CIS Central Asian leaders and to hold bilateral talks with Turkmen President Saparmurat Niyazov.

On April 9, Nazarbayev and Niyazov signed a memorandum to begin work to officially define their common border, an agreement on cultural cooperation and an agreement on establishing a joint inter-governmental commission on trade and investments. But the most important point the two agreed on -- though not in writing -- is the goal of directing exports of gas and oil from their two countries eastward to China and Japan.

Niyazov met Nazarbayev at the Ashgabat airport to hold talks in advance of those being held with the other three Central Asian presidents.

Following the brief meeting, Niyazov told reporters about the new cooperation between his country and Kazakhstan:

"I just held talks with my Kazakh counterpart Nazarbayev and we agreed to commit ourselves to cooperation with China. We highly value our friend [Chinese President] Jiang Zemin. I say again, Nazarbayev and I agree on this. To cooperate with China and Japan in the 21st century will give a strong push to the development of the infrastructure in our region, because it will help develop transport links."

Kazakhstan has already signed a contract with China worth $9 billion to develop and ship oil and natural gas from fields in western Kazakhstan through a pipeline the Chinese will help build. That pipeline will originate from a point not far from Kazakhstan's border with Turkmenistan, facilitating a linkup with fields in Turkmenistan.

The plan promises to be less complicated than natural gas and oil export projects both countries are already involved in with international companies. Kazakhstan ships oil west via Russian pipelines and has an exchange agreement with Iran to ship crude oil by tanker across the Caspian Sea. It then receives the same amount of crude oil for export at Iranian ports on the Persian Gulf.

But the country's major projects suffer from political concerns. The rich Tengiz oil fields are being developed with the help of companies from the United States. That makes any shipments via Iran impossible, given U.S. policy toward Tehran, and exclusively via Russia undesirable.

Turkmenistan also shares these concerns in its plans to export natural gas. Turkmenistan does ship a limited amount of gas to Iran and plans to use this route to export to Turkey. But again, U.S. companies are involved in the projects at Turkmenistan's major fields, mitigating the Iranian route and forcing the construction of a trans-Caspian pipeline. Construction of that project is due to begin this year but will take several years to complete and must take into account links through the volatile Caucasus before the gas reaches buyers in the west.

Exports to China will be much easier. In the northeastern direction, the only country between Turkmenistan and China is Kazakhstan. Only one foreign company is involved in the Kazakh pipeline deal, China's National Oil Company, another factor that makes this route attractive.

The arrangement may also ease problems in southwestern Kazakhstan, which receives natural gas for heating and power from Turkmenistan. Kazakhstan has fallen behind in its payments to Ashgabat several times and its natural gas has subsequently been cut off. Common pipelines bringing gas and oil to China may foster a more forgiving attitude from Ashgabat the next time such a problem arises.

The "political council" the two heads of state agreed to set up may also help further relations between the two countries. Niyazov said on Friday (April 9) that he and Nazarbayev will meet at least once a year to talk about a united stand on political issues and within international organizations.

But the real significance of the Niyazov-Nazarbayev meeting, and the Central Asian summit, is that it is another sign that Turkmenistan -- officially recognized as a neutral nation by the UN -- is actively pursuing better relations with its neighbors in the region.

Turkmenistan has usually stayed out of unions within the region and only recently began courting better ties with Uzbekistan and Tajikistan. At the Central Asian summit in January 1998, the other four regional presidents attempted unsuccessfully to draw Turkmenistan closer.

The agreement with Kazakhstan may be a sign that Turkmenistan's isolation is coming to an end.