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Turkmenistan: Is Unpredictable President Ready To Reconsider Pipeline Project?

Turkmenistan President Saparmurat Niyazov has given a sign that he may be ready to reconsider the trans-Caspian gas pipeline project. His recent decisions make progress unpredictable, but competition from other countries may give him little choice. RFE/RL correspondent Michael Lelyveld files this report:

Boston, 10 August 2000 (RFE/RL -- After several months of negative comments, Turkmenistan's president has suddenly turned positive on the prospects for the trans-Caspian pipeline project.

This week, President Saparmurat Niyazov had hopeful words for the gas pipeline to Turkey as he met with Ankara's ambassador and invited Turkish President Ahmet Necdet Sezer to visit the country.

Niyazov noted that Turkey will soon be getting gas from both Iran and Russia's Blue Stream pipeline across the Black Sea.

The president told the ambassador, "These two countries will sell Turkmen gas to Turkey as if it were their own. It will therefore be as well for us to finalize the trans-Caspian natural gas pipeline project," the Turkish Daily News reported.

Niyazov invited President Sezer to visit Turkmenistan and said he would soon send Turkmen Foreign Minister Batir Berdiyev to meet with his Turkish counterpart, Ismail Cem.

The statements mark one of the few favorable signs for the U.S.-backed project since agreements were signed at the OSCE security summit in Istanbul last November. Shortly afterwards, Azerbaijan discovered gas in its Caspian sector, touching off a struggle over sharing the pipeline's capacity.

Since then, Niyazov has frequently criticized the financial terms offered by the pipeline's developers. PSG International, a partner in the project, all but ceased operations in June, leaving Royal Dutch/Shell to pursue it alone.

Last week, Shell warned that Turkmenistan would soon lose its opportunity for exports because of Azerbaijan's plan to pipe its own gas to Turkey. That concern may finally be having an effect on Niyazov.

Also last week, Iran signed a new protocol with Turkey to finalize the operational terms of its 1996 gas supply contract. Iran is now set to start deliveries by next July. As the plans of both Russia and Azerbaijan for new pipelines show signs of progressing, Niyazov may be slowly starting to realize that the competition is no idle threat.

But Niyazov may be too quick in assuming that both Iran and Russia will only be selling Turkmen gas. Turkmenistan has yet to reach deals on increasing its supplies to either country, despite repeated attempts.

In April, Iran cut its modest gas imports from Turkmenistan by half after complaining that Ashgabat had been unable to make enough supplies available to a pipeline between the two countries. Niyazov tried but failed to reach a deal on raising his exports to Iran in time for the Tehran summit of the Economic Cooperation Organization in June. Iran received only 1.1 billion cubic meters of Turkmen gas in the first six months of this year.

Niyazov has also apparently made little progress in negotiating a price for more gas exports to Russia since President Vladimir Putin visited Ashgabat in May. Despite Niyazov's recent claim that he is ready to sell 100 billion cubic meters of gas without "any preliminary preparation," he has been forced to invest in new facilities for the Dauletabad gas field in order to honor his export pledges to Moscow.

While he has rejected concrete proposals for the trans-Caspian pipeline, Niyazov has continued to chase a series of dreams. The latest idea is a deal to deliver huge volumes of gas to Ukraine, despite its long history of failing to pay its gas debts. Meanwhile in Kyiv, government officials have floated the idea of building a pipeline from Turkmenistan that would bypass Russia. It has yet to be determined who would pay for such a line.

So far, the negotiations with Ukraine have only led to embarrassment. Last month, Ukrainian Deputy Prime Minister Yuliya Timoshenko reached an agreement on gas sales during meetings in Ashgabat, only to have President Leonid Kuchma denounce the pact as a "deception" one day later because Russian transit charges were left out.

On the next day, Niyazov fired his respected foreign minister, Boris Shiykmuradov, after criticizing his poor command of the Turkmen language. It is unclear whether bad translation was blamed for the problem with the Ukrainian deal. Kuchma now plans to visit Ashgabat and negotiate the issue himself.

Meanwhile Russia, Iran and Azerbaijan have all been proceeding with their plans for gas exports to Turkey, leaving Niyazov with no progress to show. Even with his agreement, the trans-Caspian project would face serious engineering and political challenges. But dealing with Niyazov seems to be the toughest problem of all.