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Turkmenistan: U.S. Has No New Offers On Trans-Caspian Pipeline

A U.S. official says that negotiations with Turkmenistan on a trans-Caspian pipeline have stopped amid signs that relations have reached a low point. Turkmenistan President Saparmurat Niyazov is seen as trying to bargain for better terms, but the United States has no new offers for Ashgabat. RFE/RL Correspondent Michael Lelyveld reports.

Boston, 31 May 2000 (RFE/RL) -- A U.S. official says the United States is taking a wait-and-see attitude toward Turkmenistan President Saparmurat Niyazov and his refusal to approve terms for building a trans-Caspian gas pipeline.

Speaking in a recent telephone interview from Washington on condition of anonymity, the U.S. government official denied reports that the administration of President Bill Clinton has abandoned hope for the pipeline project.

The official said: "We're not de-emphasizing the trans-Caspian pipeline in the policy. We're saying we've gone as far as we can in making it attractive to Turkmenistan."

Most analysts believe that prospects have dimmed dramatically for the gas line from Turkmenistan to Turkey since February, when Niyazov criticized the U.S. envoy on the Caspian, John Wolf, during a ceremony broadcast on Turkmen television.

The U.S.-backed project appeared to suffer a further setback in May, when Russian President Vladimir Putin visited Ashgabat and committed his country to buy more of Turkmenistan's gas. With the direction of Turkmen exports now moving north instead of west, the consortium for the trans-Caspian pipeline has decided to freeze spending for the project.

The U.S. official confirmed that patience with Niyazov has run thin since the Wolf visit three months ago.

The official said, "We've changed our approach. We don't have any plans to go back until we hear from Mr. Niyazov." Officials believe that Niyazov will soon realize that he has made Turkmenistan too dependent on Russia, which may be in a position to dictate a low price for Turkmen gas.

Niyazov's refusal to renew the mandate for the trans-Caspian project is seen as a bargaining tactic with the companies behind the venture, including U.S.-based Bechtel and General Electric Company, as well as Royal Dutch/Shell. But the United States has apparently had enough of Niyazov's tactics.

The official told RFE/RL: "We don't want to be part of this bargaining. We're just going to sit there quietly and watch him self-destruct if we have to."

One of the reasons for impatience is that Niyazov has reportedly changed his own terms. The U.S. official confirmed that Niyazov has again been pressing the project developers for a bonus payment of some $500 million after he agreed to drop the demand during a recent visit of former Turkish President Suleyman Demirel.

The official agreed that the failure of the 2,000-kilometer project would leave the United States and Turkmenistan with few common interests. Niyazov has shown little taste for democracy or economic reform, the official said.

The change in U.S. attitudes comes amid reports that Azerbaijan has opened negotiations for its own gas sales to Turkey. Tensions over Azerbaijan's demands for half of the trans-Caspian pipeline's capacity have also stalled the project. Last year, Azerbaijan found huge gas fields in its sector of the Caspian, which is closer to the Turkish market than Turkmenistan.

On Tuesday, an official of the Azerbaijan state oil company SOCAR said the trans-Caspian line is unlikely to be completed before 2006, even if the country's dispute with Turkmenistan is settled, according to the Reuters news agency. Plans have called for completion in 2002.

SOCAR's chief of foreign investment, Valekh Aleskerov, is quoted as saying, "The trans-Caspian gas pipeline cannot physically be ready before 2006, and that will only be if all the agreements are reached this year."

The statement is likely to be a competitive one. Azerbaijan and the oil company BP Amoco are planning their own gas deliveries to Turkey in 2002 by rebuilding an existing pipeline network through Georgia.