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Turkmenistan: Gas Pledges May Be More Than Can Be Delivered

Turkmenistan is reported to be negotiating a sixfold increase in gas exports to Russia. But the deal is only one of many that has raised questions about Ashgabat's claims that it can simultaneously supply a long list of countries, including Ukraine, Iran, Turkey, and Pakistan.

Boston, 26 July 2002 (RFE/RL) -- Turkmenistan's many offers of gas exports have created a web of conflicting promises to prospective buyers in countries ranging from Russia to Pakistan.

In the past two weeks, Ashgabat appears to have negotiated gas sales that far exceed its production and pipeline capacity, raising doubts about whether all its commitments can be met.

The inconsistent offers are part of President Saparmurat Niyazov's longstanding practice of setting inflated targets for Turkmenistan's energy sector. But the latest examples come as his government is promoting a project for a gas pipeline through Afghanistan to Pakistan, prompting questions about whether it can supply enough fuel while also increasing exports to countries including Russia, Ukraine, and Iran.

Last week, officials of the Turkmen Oil and Gas Ministry held talks on raising the country's sales to Russia's Gazprom, official media reported. According to Turkmen television, Gazprom "proposed increasing annual gas supplies first to 30 billion cubic meters and then to 60 billion cubic meters."

The amount would be six times more than the 10 billion cubic meters that Russia was expected to import from Turkmenistan last year. In reality, Russia may have bought as little as 2 billion cubic meters, according to a Platt's Global Energy report.

Although Gazprom has not verified the huge new request, Russia signed a 10-year agreement on gas cooperation with Turkmenistan last December. The accord was subject to contracts that have yet to be signed.

Negotiations with Russia have been stalled for over two years by Niyazov's price demands. But there are also reasons to wonder whether Turkmenistan could fill such a large order, even if Russia asked.

In a press release issued on 23 July, the Turkmen Foreign Ministry argued that the increases are possible because "Turkmenistan can export 100 billion cubic meters of gas annually," although it exported only 37 billion cubic meters last year, according to government data.

The 100 billion figure is only one of many that Turkmenistan has cited to promote its export ability, which has fallen off sharply since Soviet times. Last December, Niyazov said the country could sell 120 billion cubic meters of gas, 60 percent more than its record exports in 1991.

Regardless of claims, sales of such size to Russia seem unlikely since they would exceed the capacity of the former Soviet pipelines that carry Turkmen gas through Uzbekistan and Kazakhstan.

In January, Niyazov cited the transit limit of the crumbling Central Asia-Center pipeline network as 70 billion cubic meters a year. Analysts have put the number at 50 billion. Earlier this month, Dow Jones Newswires cited the capacity as only 47 billion. Kazakhstan plans to invest $500 million to raise the annual throughput to 60 billion on its part of the line.

Whichever numbers are used, Turkmenistan's export targets do not add up, because it also plans on shipping 40 billion cubic meters of gas to Ukraine through the same lines this year. Any capacity left over would probably be taken by Kazakhstan and Uzbekistan. But even without them, Turkmenistan could sell only another 7 billion cubic meters to the north, not 60 billion, as officials have claimed.

Even with pipelines in other directions, there are reasons to challenge Turkmenistan's total export capacity. Assuming that the figure of 100 billion cubic meters is right, officials have already negotiated for annual exports of over 150 billion cubic meters. The total includes 30 billion cubic meters of gas that Niyazov wants to pipe through Afghanistan to Pakistan.

Besides the proposed exports to Ukraine and Russia, the total includes 6.5 billion cubic meters in planned sales to Iran this year, 10 billion to the gas trader Itera for CIS countries and 5 billion to Turkey in 2005 through a route yet to be determined.

Many of these exports may not materialize, although Niyazov keeps insisting that they all can and will. Despite the promises, it is likely that any big boost in exports to Russia would have to come from Turkmenistan's giant Dauletabad gas field, which is also the planned resource for Pakistan to the south. It is unclear whether both would be possible at the same time.

In the meantime, Ashgabat's goals seem to depart further and further from reality. In May, the government announced that 2002 gas production would rise 40 percent. But in the first half of this year, output was up 9 percent, Interfax reported, citing figures from the National Statistics Institute.