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Turkey: Summit Could Have Lasting Meaning For Caspian Countries

Boston, 5 November 1999 (RFE/RL) -- As Caspian nations scramble to line up their pipeline and peace deals before the OSCE summit this month, there are signs that the stakes may be nothing less than determining a dividing line between east and west.

In the past month, leaders and diplomats from most of the countries in the region have been in seemingly constant motion, seeking agreements to bring to Istanbul on November 18. Pacts on oil and gas pipelines and peace in Nagorno-Karabakh are all said to be possible.

Turkey has been tireless in its diplomatic shuttles, playing multiple roles. The country is the OSCE host, a potential candidate for membership in the European Union, the prize market for Caspian gas, the transit country for oil and the ethnic cousin of most of the Caspian states. This week Turkish Prime Minister Bulent Ecevit has taken his mission to Moscow, hoping to seal agreements for the Blue Stream gas project that would pipe Russian gas across the Black Sea.

In recent days, Turkish President Suleyman Demirel has toured the region and exchanged visits with President Heidar Aliyev of Azerbaijan in support of both the Baku-Ceyhan oil pipeline plan and peace for Nagorno-Karabakh. U.S. Deputy Secretary of State Strobe Talbott has also crisscrossed the region. But keeping the threads of all these deals together has been a tricky and dangerous business.

Although the links remain uncertain, the drive for agreements has been accompanied by the chaos of assassinations in Armenia, resignations in Azerbaijan and devastation in Chechnya. As in the Middle East, the race for peace may carry equal risks for war.

But increasingly, there are signs that those who do not bring deals to Istanbul will lose out. This seems particularly true in the case of pipelines. Despite widespread skepticism about the practical effect of agreements, the Istanbul summit could be a watershed event.

Turkey has been trying to keep its long list of would-be gas suppliers together by assuring Russia, Azerbaijan and Turkmenistan that each of their pipeline plans is a priority for Ankara. Clearly, they cannot all be equal priorities, as one of the group seems sure to find out.

Distant Turkmenistan may be at the greatest disadvantage with its plan for a trans-Caspian pipeline that would have to cross Azerbaijan. Because Baku recently found gas in its own sector of the Caspian, it can demand favorable transit and access terms for the trans-Caspian line. Turkey also needs Azerbaijan to support the Baku-Ceyhan oil line, giving it an even stronger hand to play.

Understandings have been reached by Turkey, Azerbaijan, and Georgia that will allow a series of agreements to be signed on the Baku-Ceyhan line. A pact on Blue Stream is also likely to be a necessity for Turkey because it has already signed a contract to pay for gas from Russia, which is its primary supplier. Turkey has a similar "take-or-pay" deal with Iran, which could make Turkmenistan the last in line to sell its gas.

On October 11, Turkmenistan announced that it had approved the terms of a framework interstate agreement to be signed with Azerbaijan, Georgia and Turkey at the OSCE meeting. But more recent reports suggest that the start of the trans-Caspian gas pipeline could be delayed.

At the same time, Iran announced this week that it will boost its gas purchases from Turkmenistan to 8 billion cubic meters per year from the current level of 1.3 billion. The big increase has reportedly been made possible by a cut in Turkmenistan's gas price.

Taken as isolated developments, these deals may mean little. But taken together, they could leave Turkmenistan more reliant on Iran while its competitors forge ties to the west. A failure to sign even a preliminary agreement at the OSCE summit could leave Turkmenistan behind and isolated on the Caspian's eastern shore.

While Kazakhstan has also been discussing deals with Iran, it has outlets to the west in progress with the construction of the Caspian Pipeline Consortium's export link to Novorossiysk. Russia has recently agreed to increase Kazakhstan's oil transit through pipelines to the north, as well.

But the magnet of western markets may not be strong enough to reach across the Caspian Sea. Even if Turkmenistan can break through its isolation, its agreement to lower its gas prices to Iran may leave it vulnerable to similar demands from Turkey and Russia. Turkey's purchase-and-sale agreement to buy Turkmenistan's gas would allow Ankara to renegotiate prices after six months, even if a trans-Caspian pipeline is built. Falling prices could make pipeline financing more difficult.

Critics often find little of substance in summits. But even if the OSCE meeting is only symbolic, its achievements could have lasting meaning for the Caspian countries, particularly for those which are left out.