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Turkmenistan: Gas Industry Seeks Export Routes

Turkmenistan possesses a wealth of oil and natural gas resources -- the trouble is, it is having a hard time getting those resources to market. RFE/RL correspondent Bruce Pannier reports that the country's lack of export routes is hindering it in its trade with Russia and Turkey.

Prague, 15 October 1999 (RFE/RL) -- Turkmenistan is in the midst of the latest round of negotiations with prospective oil and gas customers, notably Turkey. But last week's meeting with visiting Turkish officials once again highlighted Turkmenistan's greatest weakness in negotiating -- the lack of means to export its oil and gas wealth.

Production levels have steadily increased in the last few years, but that has not translated into the huge amounts of income that Turkmenistan says will turn the country into a second Kuwait. Still, the Oil and Gas Ministry has announced further ambitious plans to increase production. On Wednesday (Oct. 13), the ministry announced a plan for the next decade that envisions greatly enhanced production -- more than tripling gas production and quadrupling oil production. The plan does not, however, address how to get that gas and oil to the buyers.

Turkmenistan has only two export pipelines for natural gas -- one that goes through Russia, and a newer and smaller pipeline to Iran. Turkey has received gas supplies through Russia for some time, and in the days of the USSR a good deal of it came from Turkmenistan. But now, all the gas coming to Turkey from Russia is Russian gas.

The Russian company Gazprom and the Turkmen government have been in dispute over the price of Turkmen gas. Because of the dispute, no Turkmen gas has traveled to Turkey through Russia for nearly three years.

So Turkmenistan has been forced to seek other routes and other customers for its gas. The favorite idea now is the construction of a trans-Caspian pipeline, along the Caspian Sea bed to the Caucasus and into Turkey. That plan still remains on paper, however, and Turkmen President Saparmurat Niyazov is tired of waiting.

With that as the backdrop, Turkish Energy Minister Cumhur Ersumer visited the Turkmen capital, Ashgabat, last week (Oct. 6). Turkey and Turkmenistan have discussed a number of plans for shipping Turkmen gas, oil and even electricity to Turkey. But the normally good relations between the two countries seemed to sour while Ersumer was in Turkmenistan.

Turkmen President Niyazov had some harsh words about Turkey's purchasing of natural gas from Russia.

"I do not understand your new politicians at all. You can purchase our gas at a reasonable price. You can buy our gas for $70 per 1000 cubic meters on the border. You buy the same gas from Russia for $114. Don't your politicians think about your people? Purchasing Turkmen gas is your only way. Turkmenistan has 23 trillion cubic meters of gas. This is sufficient for both Turkmenistan and Turkey for a period of 500 years. Yes, 500 years! So what are you waiting for?"

The Turkish energy minister said the discussions were friendly. But Niyazov's words to Ersumer in public seemed to show his frustration:

"For the past eight years I have been running after you, for the purpose of bringing Turkmen gas to your homes. From now on, you should be running after me to purchase it."

Niyazov told Ersumer that if Turkmen gas could not reach Turkey soon, Turkmenistan would have to look at other buyers.

Despite the years of impasse, Russia could be such a buyer. Russia's has offered to purchase gas from Turkmenistan by paying 40 percent of the price in hard currency and 60 percent in goods. Turkmenistan has consistently argued that the barter portion of the deal is unacceptable, saying it could acquire better-made goods from other countries. But now, it may have reason to accept weapons as the barter portion of the deal.

This week, Russian officials were in Ashgabat to discuss the final withdrawal of Russian military advisers from Turkmenistan later this year. With the departure of the Russians, Turkmenistan will lose its last claim on help from Moscow should trouble break out. Turkmenistan's neighbors to the south are Iran and Afghanistan, and while Ashgabat enjoys good relations with both those regimes, the future must be a consideration. Military hardware could acquire an added value as barter goods.

For now, relations with Iran seem about to improve even more. And Niyazov played that card when speaking with Ersumer last week.

"Iran also has some proposals. Soon, the Iranian foreign minister is coming to Turkmenistan. Then we can discuss the matter (natural gas exports) with their officials. A pipeline of 60 kilometers will be constructed between Sarakhs and Masshad. Therefore Mr. Cumhur Beg, we as two old friends taking into account our peoples' interests, must accelerate the gas issue. Turkmen gas is very important for the benefit of the people. We should come to a decision. We should not be hesitant. This would be a big step toward the interests of the Turkish people. So consider your internal affairs."

An Iranian delegation will be in Ashgabat on Monday. Turkmenistan to date has been willing to make deals with any and all interested parties, courting proposals from the United States, Iran, Russia, Afghanistan's Taliban movement and Turkey. Now, however, Niyazov seems determined to find a partner who will immediately solve the export route dilemma, purchase the gas and help realize the ten-year plan.

(Mohammed Zarif Nazar, Govatnch Gueraev, and Rozinazar Khoudaiberdiev of the Turkmen Service all contributed to this article.)