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Turkmenistan: Putin Set To Pursue Gas Deal

In the midst of disasters, Russian President Vladimir Putin has taken time to pursue an unfinished gas deal with Turkmenistan, underscoring the importance of securing energy supplies before winter sets in. In recent weeks, Turkmenistan President Saparmurat Niyazov has also been exploring an independent line in an effort to show Moscow that his country's policies and gas resources cannot be taken for granted.

Boston, 31 August 2000 (RFE/RL) - The latest maneuvers of Turkmenistan President Saparmurat Niyazov appear to have captured the attention of Russian President Vladimir Putin, who may now be ready to reach a deal for more Turkmen gas.

On Monday, Putin called Niyazov to talk about issues including the legal status of the Caspian Sea and bilateral cooperation, the Interfax news agency reported. Shortly afterward, a Russian energy official told the Reuters news agency that Gazprom chief Rem Vyakhirev would soon visit Ashgabat, adding that the two presidents had also discussed the unfinished business of gas sales.

The timing of the call may be as important as the substance. During a second week of crises in Russia, Putin took the time to deal with the problems of energy. One implication is that after the sinking of the submarine Kursk and the burning of the Ostankino television tower, the last thing Putin needs is for Russian voters to run out of winter fuel.

In addition to seeking more gas from Turkmenistan, the Russian Energy Ministry announced that oil producers will be required to keep 90 percent of their fuel oil and 75 percent of their diesel fuel inside the country in September. Export allowances will be set each month for the winter, marking the latest of many changes to oil export policy since Putin took charge. The idea may be that after the recent sorrow and anger, the government will be more careful about the risks of darkness and cold.

The call to Niyazov comes three months after Putin traveled to Ashgabat and agreed to an increase in gas purchases, but only in principle. The two sides failed to settle on a price after Russia insisted on paying even less than it does for its current supplies from Turkmenistan.

Most recently, Gazprom has said that it wants to buy 8 billion cubic meters of gas in addition to its original contract for 20,000 million cubic meters this year. Although Russia's gas production remains high, so are its export commitments, giving it a motive to secure further supplies from Turkmenistan.

Many analysts saw a victory for Putin in May even without a deal, because Turkmenistan's offer to provide up to 50,000 million cubic meters of gas annually might leave it with little for the competing trans-Caspian pipeline, which is backed by the United States. In the weeks that followed, a U.S. consortium for the trans-Caspian project closed its offices and all but abandoned hope.

But Niyazov has since told Royal Dutch/Shell that he is still interested in the pipeline to Turkey, leading the company to announce that an approval could come in a matter of days or weeks.

That statement appears to have caught Putin's attention and made him more serious about concluding a deal. Niyazov has recently played another card in the Caspian, showing that Ashgabat is not to be taken for granted as a Russian source of cheap energy.

In July, Niyazov firmly rejected proposals on dividing the Caspian after meeting with Russia's envoy, Viktor Kaluzhny. Turkmenistan sided instead with Iran, which insists on either joint administration or a 20 percent share.

In Tehran this week, Turkmenistan's representative, Boris Shikhmuradov, met with Iranian Foreign Minister Kamal Kharrazi and declared a common interest in the Caspian. The message to Putin may be that more attention is needed to make Ashgabat a compliant partner for Moscow again.

In addition to moves on Caspian division and the trans-Caspian pipeline, Niyazov has been talking with Ukraine about possible new supplies of gas. The option is likely to be a false hope for Kiev, which is struggling with its gas debt to Russia, considering that Turkmen gas must still come through Russian pipelines. But even a preliminary agreement on alternate supplies could undercut Russia's position in its dispute with Ukraine.

All things considered, Putin may have good reasons to negotiate a gas deal with Turkmenistan now. The question is whether Turkmenistan will simply reverse its recent positions if a new deal with Moscow is signed.

If Niyazov is serious about the trans-Caspian pipeline plan, he will not abandon it simply for the sake of some additional gas sales to Russia. But if Niyazov sees the project as little more than a bargaining chip with Moscow, both Gazprom and the pipeline developers may soon find out.