Kremlin Strengthens Gas Partnership

As Russia steps up efforts to fend off western influence in the Turkmen gas sector, and NBCentralAsia experts say it is all set to make huge concessions to Ashgabat.



During talks with Turkmen president Gurbanguly Berdymuhammedov in the Kremlin on April 23, Russia’s Vladimir Putin proposed broadening energy cooperation with Turkmenistan and upgrading the Central Asia-Centre pipeline which takes gas to Russia.



The Russian president also proposed laying a branch pipeline along the Caspian Sea shore via Kazakstan.



Putin will pay a return visit to Ashgabat in mid-May to get his answer.



At a Turkmen-Russian economic forum held in Moscow on April 26, several large Russian energy companies expressed interest in developing Caspian shelf deposits and building plants to produce liquefied natural gas.



Energy experts say all this activity is because Turkmenistan has recently started looking into alternative markets for its gas. Although it has large oil and gas reserves, Turkmenistan’s export routes are limited to gas pipelines controlled by the Russian giant Gazprom.



According to Kazak analyst Maksim Kaznacheev, Moscow will soon try to convince Ashgabat that it cannot sit between two stools, and will at the same time time propose a number of profitable projects. These may include setting up a joint venture to sell Turkmen gas to European markets, establishing fixed transit prices for gas that goes through Russia, and supplying Turkmenistan with gas extraction equipment at the low prices available to domestic Russian firms.



According to Azerbaijani expert Rovshan Ibrahimov, Ashgabat is interested most of all in attracting investment to develop existing deposits, explore new ones and increase extraction volumes. Thus, the Kremlin will actively encourage Russian companies to put their money into projects of this kind.



“Russia is trying to secure a guaranteed supply of gas from Turkmenistan, since it is likely its domestic gas production won’t be enough to meet even Russia’s own needs in several years,” said Ibrahimov.



However, NBCentralAsia energy expert Yaroslav Razumov believes the Kremlin won’t have to try too hard to strengthen its energy partnership with Ashgabat because there are no alternative projects on the horizon that would pose any real threat to Russian interests.



“If the United States or the European Union were able to come up with a gas pipeline project that was both economically viable and politically risk-free, Ashgabat would be less oriented towards Russia, [but since that hasn’t happened] the Turkmen leadership currently has no alternative,” he said.



Ashgabat can certainly try to get major geographical players to bid for access to its gas reserves, but constructing alternative pipelines to Europe or China would take at least three or four years, while the Central Asia-Centre pipeline to Russia can be restored much faster than that, added Razumov.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)