EurasiaNet Business & Economics - Prikaspiisky Pipeline: Temporary Delay or Fundamental Problem?

BUSINESS & ECONOMICS

PRIKASPIISKY PIPELINE: TEMPORARY DELAY OR FUNDAMENTAL PROBLEM?
6/26/07

Could there be trouble in energy paradise? It looks like it.

In May, it seemed like Russia and Turkmenistan had become partners for eternity after Russian leader Vladimir Putin agreed to a deal with his Turkmen counterpart, Gurbanguly Berdymukhammedov, on the refurbishment and expansion of the Prikaspiisky natural gas pipeline. [For background see the Eurasia Insight archive].

Now, it appears Berdymukhammedov is having second thoughts about the Prikaspiisky deal, perhaps out of concern that Ashgabat won’t get its fair share of the profits under deal as presently envisioned. The chief sign that Turkmenistan may be reconsidering its energy allegiance was the postponement of a visit by a Russian delegation to be led by Vice Prime Minister Sergei Naryshkin.

Naryshkin was to have participated in a session of the Russian-Turkmen Inter-Governmental Commission, which had been scheduled for June 22 in Ashgabat. Those talks were supposed to have hammered out details of a comprehensive Prikaspiisky pact. After agreeing in principle to the deal in May, both Putin and Berdymukhammedov indicated that the formal agreement would be ready for signing in September. But it is uncertain whether that timetable still holds.

Just days before the start of the visit, Turkmen officials put off the meeting without immediately supplying a reason. According to a report posted June 23 on semi-official Turkmen web site Turkmenistan.ru, Naryshkin’s visit has been rescheduled for July 10. The site attributed the postponement to a scheduling conflict involving Turkmen Foreign Minister Rashid Meredov.

Though there is no way of determining for sure, all available evidence suggests the postponement was not a mutual decision. On June 19, just three days before the inter-governmental commission was to convene, the Itar-Tass news agency distributed a report in which Putin told Naryshkin that "it must be ensured that such high-level meetings make long strides forward, identify problems that hinder progress, and eliminate them." Given Putin’s attitude on the Prikaspiisky deal, the abrupt and opaque manner in which Ashgabat acted could only have been a source of embarrassment for the Kremlin.

There is likewise no way of knowing for sure what prompted Berdymukhammedov to act as he did. Was it simply a negotiating tactic, or was the Turkmen leader thinking about backing out of the pact altogether? Heightening the intrigue was the fact that Berdymukhammedov met with a top US military official, Adm. William Fallon, on June 21 in Ashgabat. During those talks the Turkmen leader expressed a desire to bolster economic and security cooperation between the United States and Turkmenistan. Berdymukhammedov also endorsed the idea of Turkmen participation in a trans-Caspian gas pipeline (TCP), the construction of which is strongly supported by Washington. [For background see the Eurasia Insight archive]. The TCP route is acknowledged to be the direct competitor of the Prikaspiisky pipeline. The TCP route would also circumvent Russia, and thus its construction, and use by Turkmenistan and Kazakhstan, would deal a staggering blow to the Kremlin’s regional energy policy.

On June 26, Berdymukhammedov met with visiting US Deputy Assistant Secretary of State Evan Feigenbaum and reiterated Ashgabat’s commitment to exploring the feasibility of Turkmenistan ’s participation in the TCP project.

At the very least, Berdymukhammedov seems to have ripped a page out of the playbook of his predecessor, Saparmurat Niyazov, who had a reputation for mercurial behavior and a preoccupation with keeping the country’s geopolitical options open.

Some experts believe the postponement was intended by Ashgabat as a signal of displeasure over the Kremlin’s perceived high-handed approach to the Prikaspiisky deal. Turkmen officials were reportedly miffed by the fact that the Russian-Turkmen Inter-governmental Commission meeting did not have a well-defined agenda. That led some in Ashgabat to suspect that Russia was making unfounded assumptions about Turkmenistan’s position � that Naryshkin might show up in Ashgabat expecting to dictate the details of the agreement. If this accurately reflects Turkmen concerns, then the postponement tells the Putin administration that Turkmenistan’s cooperation cannot be taken for granted, and that Ashgabat may not be inclined to give Russia the type of discounts that the Kremlin perhaps feels entitled to.

For Putin, a man increasingly used to getting his way both at home and abroad, the recent turn of events is no doubt a source of consternation. They could prove much more for Naryshkin, who in recent months has been touted as one of several possible presidential successors to Putin in Russia. Thus, the outcome of the Prikaspiisky negotiations could end up influencing domestic Russian politics.

Earlier this year, presidential aide Igor Shuvalov fueled speculation that Naryshkin could be a surprise candidate, and one backed by the incumbent. "People speak about two possible [presidential] candidates [First Vice Prime Minister Sergei Ivanov and Vice Prime Minister Dmitri Medvedyev], but my president may give a surprise, and later this year you may learn the name of another possible figure," Shuvalov said." Naryshkin has enjoyed Putin’s apparent favor and has received heavy coverage by the pro-government Russian media recently. Just ahead of the Turkmen visit, he was also appointed President Putin’s special representative for integration and cooperation with CIS states.

For Naryshkin, then, more than just energy exports is at stake over whether Berdymukhammedov allows him to visit Ashgabat. This, of course, provides the Turkmen leader with additional negotiating leverage.

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