Turkmenistan wants to export gas to Europe without angering Russia


The Caspian heads of state summit held in the capital of Turkmenistan last week passed almost entirely without notice but for one detail: the table.

As Financial Times reporter Max Seddon quipped on Twitter, it looked big enough to “fit an entire hockey rink in the middle.”

It’s likely the choice of furnishing was epidemiologically motivated. The unwitting effect, however, was to convey a sense of diplomatic distance among the five nations represented.

The last time one of these summits took place, in August 2018, it produced a landmark convention on the legal status of the Caspian Sea. Many argued this constituted a green light for long-pursued energy transportation projects like a trans-Caspian pipeline for carrying gas from Turkmenistan to Azerbaijan. The reality has been a little more mundane.

A persistent potential stumbling block is the notional trump card still available to spoiler Caspian partners. Should Russia, for instance, wish to stymie a pipeline project, it may in theory cite environmental concerns.

This may explain why Turkmen President Serdar Berdymukhamedov used the Ashgabat summit to propose what he termed a Caspian ecological agenda.

“On this, Turkmenistan takes a clearly formulated and principled position: all economic and productive activities must correspond strictly with the ecological integrity of the basin and comply with recognized world standards on environmental protection,” he said. 

The mooted trans-Caspian pipeline had fallen down Turkmenistan’s list of priorities of late, especially as Ashgabat has been investing more energy into the trans-Afghan TAPI route. This might be changing, though.

On July 1, Berdymukhamedov met in Ashgabat with Turkish vice president Fuat Oktay in what looked like yet more preparation for a three-way heads of state summit with Azerbaijan expected later this year. 

The next day, Turkish news website Star quoted Oktay as saying that three scenarios were being envisioned for getting Turkmen gas to Turkey, for putative conveyance forward to markets in Europe.

One would be to build that elusive trans-Caspian route and then feed gas into the Trans-Anatolian Natural Gas Pipeline, more commonly known as TANAP. 

Another would be to get the fuel to Turkey via a series of swap agreements like the one now in place between Azerbaijan, Iran and Turkmenistan. The Turkmens have reportedly expressed interest in boosting the volumes of gas being moved that way. Iranian President Ebrahim Raisi returned supportively to this idea in a tête-à-tête with Berdymukhamedov on June 29.

A third scenario envisioned by Oktay was for gas to be carried across the Caspian by ship. 

The appeal of Turkmen gas for Europe is that it would help reduce reliance on Russia. Turkmenistan is not willing, however, to be seen as being at odds with Moscow, which remains its most important economic partner.

While in Ashgabat, Russian President Vladimir Putin intimated that the leadership of state-run gas company Gazprom would soon be paying a visit to Turkmenistan. The purpose of this visit, he said, would be to ensure continuity in existing supply agreements.

Moscow resumed buying gas from Turkmenistan in 2019 after a years-long interlude. Late in 2021, the Russian ambassador to Ashgabat, Alexander Blokhin, created surprising news by revealing that Moscow had that year doubled the amount of gas it normally bought from Turkmenistan to 10 billion cubic meters. This was eye-catching because the five-year deal reached in 2019 only envisioned annual deliveries of 5.5 billion cubic meters.

Russia has achieved respectable results in cornering Turkmen trade on many fronts, not just energy. When Berdymukhamedov visited Moscow last month, Putin noted how bilateral trade had increased by 40 percent year on year in the first quarter of 2022.

But Ashgabat has its sights aimed further than just Russia. 

On July 4, Foreign Minister Rashid Meredov met in Ashgabat with the visiting deputy director-general of the World Trade Organization, Zhang Xiangchen. Turkmenistan formally applied for WTO accession in November and was granted applicant status in February. This discussion was intended as an update on what Ashgabat is doing to move the agenda forward. Efforts adopted by Turkmenistan so far, Meredov said, included improving the national legislative framework and the rules and procedures for foreign trade, and educating the public and business community on what WTO accession would entail.

Turkmenistan essentially wants to be a friend to all and sundry, albeit without any partner sticking their nose into its affairs. 

On the occasion of U.S. Independence Day, state daily Neutral Turkmenistan published a note from Berdymukhamedov, addressed to President Joe Biden, saying that he wished to see an “optimization” of cordial and mutually advantageous relations with Washington. Any such ties, he noted pointedly, should be founded on principles of “mutual respect, understanding and trust.”

Underneath that brief note was one addressed to Belarusian President Alexander Lukashenko, congratulating him on Belarusian Independence Day, which falls on July 3. This near-identical epistle likewise appealed for mutual respect and a dynamic development in relations.  

Minsk is invariably and understandably more responsive to such overtures. On July 2, Neutral Turkmenistan published an interview with Belarusian ambassador Vyacheslav Beskosty in which the envoy spoke hopefully about boosting trade numbers and deepening industrial cooperation. Getting down to specifics, Beskosty suggested setting up a joint-production facility, presumably in Turkmenistan, with agricultural machinery manufacturer Minsk Tractor Works.

That same issue of Neutral Turkmenistan reported on a deal with Turkish company Chalyk Energy to build a 10-megawatt solar-and-wind power plant in the western Balkan province. Construction work is to begin in July 2022 and is slated for completion by January 2024. As usual with these things, the cost of the project has not been made public, although some guidance is offered by the fact that funding for the work is likely coming from the $25 million loan that the Abu Dhabi Fund for Development extended to Turkmenistan in 2021 for this purpose.

Every good turn deserves another. On June 30, state oil and gas company Turkmennebit said in a statement that it had renewed a production-sharing agreement with UAE-based Dragon Oil through to May 2035. The existing 25-year PSA had been due to expire in 2025. The Emirati company is developing the offshore Caspian fields of Jeytun and Jigalybeg, and has, according to Turkmennebit, so far spent more than $8 billion doing so. At present, Dragon Oil fields produce around 80,000 barrels of oil daily, but the plan is to take that number to 100,000 barrels by 2025. Pleasingly for Ashgabat, of the 2,200 people employed by Dragon Oil, around 90 percent are Turkmen nationals.



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