EurasiaNet Business & Economics - Turkmenbashi in Beijing: A Pipeline Dream

BUSINESS & ECONOMICS

TURKMENBASHI IN BEIJING: A PIPELINE DREAM
Stephen Blank 4/10/06

Turkmenistan’s leader Saparmurat Niyazov’s recent visit to China proved "a complete success," as Ashgabat and Beijing took preliminary steps toward the construction of a pipeline linking the two states. If the project overcomes considerable obstacles, it could significantly alter Central Asia’s energy-export calculus.

Niyazov’s Chinese visit lasted from April 2-7. According to a framework agreement signed by Niyazov and Chinese leader Hu Jintao, the two countries committed themselves to carrying out "separate and joint actions necessary for the rapid implementation of the Turkmenistan-China gas pipeline project." The agreement envisions the route being "commissioned" in 2009. "The departments concerned will quicken their steps to study and implement" the pipeline project, said a separate joint statement issued by Niyazov and Hu. The pipeline would, in theory, run via Kazakhstan and, possibly Uzbekistan. China would "provide the bulk of raw materials" to facilitate the pipeline’s construction.

China also pledged to buy 30 billion cubic meters of natural gas annually from Turkmenistan for 30 years, starting in 2009. The two countries additionally indicated that they would carry out the joint exploration and development of gas deposits, as well as conclude a comprehensive gas purchase agreement. "The price for natural gas will be set at reasonable levels and on a fair basis, proceeding from the comparable international market price," Article 4 of the agreement states.

In addition to pipeline-related matters, security issues figured prominently in bilateral discussions. Niyazov endorsed Beijing’s "One China" policy, emphasizing that the People’s Republic was the "sole legitimate government" of the Chinese people, and adding that Taiwan was "an inalienable part" of China. In addition, the mercurial Turkmen leader agreed that combating radical Uighur nationalists constituted "an integral part of counteracting international terrorism." Uighurs radicals have carried out armed resistance to what they view as Beijing’s efforts eradicate local cultural traditions by flooding their homeland in western Xinjiang Province with Han Chinese. Beijing authorities, who characterize the Uighur homeland as "East Turkestan," view the resistance as terrorism.

China offered Niyazov political support for what is one of the world’s most repressive political systems. [For background see the Eurasia Insight archive]. The joint statement issued by the two leaders stressed that the "protection of human rights will be ensured on the principles of upholding firmly the sovereignty and equality of all countries and non-interference in their internal affairs." The two sides also reaffirmed that all states enjoyed a right to choose "their own path of development dictated by specific circumstances."

The visit offered further proof that China’s economic role in Central Asia is growing. [For background see the Eurasia Insight archive]. Such a development is beneficial for Central Asian leaders, including Niyazov, who are looking for ways to keep Russia from dictating regional energy prices. To date, Russia’s near-total control of export networks have enabled Russian leaders to compel their Central Asia counterparts to agree to far-below-world-market prices for energy.

Niyazov is clearly unhappy about having to depend on Russia as the exclusive shipper of Turkmen gas abroad. [For background see the Eurasia Insight archive]. Throughout the past year, Niyazov, fully cognizant of this situation, has tried to raise the prices for both Russia and Ukraine, trying to bring the cost of Turkmen energy more in line with world market levels. However, absent a competing market and pipeline these efforts have not succeeded. Therefore, it is imperative for Turkmenistan to open up another link by which its gas may be sold without Russian interference.

There are several possible options, but two of them � a connection with Iran, as well as a pipeline via Afghanistan to Pakistan � have remained stuck on the drawing board due to substantial political obstacles. [For background see the Eurasia Insight archive]. Thus, China offers Niyazov the most realistic option for export diversification.

This deal with China, if it succeeds, marks a significant step in Ashgabat’s drive for energy independence. Consequently, it not surprising that Russian media outlets have reported that Gazprom, the state-controlled energy giant, intends to compete with Turkmenistan in providing gas to China. This announced intention could be just the first step in a comprehensive Russian campaign to tie up Turkmen gas and prevent the completion of this pipeline through Central Asia to China.

A commentary by the state-run RIA-Novosti news agency admitted that that the need to diversify energy export routes is "a hard and fast rule of the modern market, as well as geopolitics." It went on to suggest, somewhat ominously, that Niyazov made the deal because he needs added political backing for his despotic regime. "Turkmenistan’s relations with both the West and Russia are not cloudless," the commentary stated. "The former is not happy about its human rights standards in general, and the latter disapproves of Ashgabat’s attitude to the rights of Russian speakers and the cancellation of their dual citizenship." [For background see the Eurasia Insight archive].

"There are reasons, and not only economic ones, for Turkmenistan to be in close contact with China," the commentary added. "It is quite possible that it has dawned on Turkmenbashi [Niyazov] that his 10-year-long policy of self-isolation will not have a happy ending, and he has decided to break it at the geopolitically safest Chinese direction."

Editor�s Note: Stephen Blank is a professor at the US Army War College. The views expressed this article do not in any way represent the views of the US Army, Defense Department or the US Government.

The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues.

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