Russia is reviving its interest in the Commonwealth of Independent States (CIS), apparently hoping to use the organization as a means to advance Moscow's regional trade and energy agenda. Meanwhile, Russian energy giant Gazprom agreed on November 27 to a 30 percent increase in the price it pays for Turkmen natural gas.
Russian officials played up the significance of the most recent CIS get-together a meeting of prime ministers held November 22 in the Turkmen capital Ashgabat. For years, Russian leaders had looked upon the CIS as a moribund organization, and had focused their diplomatic energy on other multilateral groupings, especially the Collective Security Treaty Organization and the Shanghai Cooperation Organization. [For background see the Eurasia Insight archive].
In Ashgabat, Russian Prime Minister Viktor Zubkov stated that the CIS remained an appropriate venue for dealing with issues of multilateral and bilateral interest of the member-states. Such sentiments were echoed in Russian media reports. To validate Moscow's CIS stance, Deputy Prime Minister Sergei Naryshkin announced that Russian trade with other member states rose 35 percent during the first nine months of 2007, in relation to the same period in the previous year. Overall, the value of goods exchanged within the CIS totaled about $59 billion during the first three-quarters of 2007.
Despite the Russian statements of support, the limits of the CIS' ability to serve Moscow's interests were readily evident in Ashgabat. Russia signed 25 out of 27 documents discussed at the CIS summit. One that Russian officials declined to sign concerned labor migration, which is a sore spot in bilateral relations between Russia and several CIS members, in particular Tajikistan. [For background see the Eurasia Insight archive]. The document discussed in Ashgabat would have helped clarify the rights of labor migrants in the CIS. The present lack of clarity is beneficial to Moscow, as it gives the Kremlin diplomatic leverage in its dealings with Tajikistan, a country that is economically dependent on cash remittances sent home by workers abroad. [For background see the Eurasia Insight archive]. In explaining Russia's decision not to sign, Zubkov reportedly said the document required more preparatory work.
Following the CIS summit, Zubkov held bilateral discussions with Turkmen leader Gurbanguly Berdymukhamedov, during which the Russian prime minister failed to make desired progress in securing Ashgabat's agreement on an expansion of the Prikaspiisky Pipeline. If realized, the project would help Russia maintain its stranglehold on energy export routes in Central Asia. [For background see the Eurasia Insight archive].
Both Russian and Turkmen officials remain upbeat about bilateral cooperation, even in the absence of a final Prikaspiisky deal. Zubkov reported that 30 large Russian corporations have submitted proposals for projects either in Turkmenistan or with Turkmen partners. "We have good projects that Russian and Turkmen ministries are currently working out," the RIA Novosti news agency quoted Zubkov as saying.
The chief object of Moscow's desire is the expansion of the Prikaspiisky Pipeline, however. Russian, Turkmen and Kazakhstani leaders signed a tentative pact in May. Since then, talks to finalize the deal have proceeded slowly. Naryshkin told the Interfax news agency on November 22 that the negotiating process was "at the final stage." The next day, Berdymukhamedov did not announce the finalization of the deal, but he did suggest that construction could begin soon. Under the original timetable, pipeline project construction would begin in mid-2008. [For background see the Eurasia Insight archive].
The existing Prikaspiisky gas pipeline carried about 400 million cubic meters of gas in 2006. The expansion would raise the pipeline's capacity to 10 billion cubic meters (bcm)/year by 2009, and up to 30 bcm/year by 2015, according to the Russian estimates.
Analysts believed that a major obstacle to a Prikaspiisky deal was a disagreement over the price of Turkmen gas. If that was the case, Russian executives appeared to clear up the issue November 27 by agreeing to pay between 30 and 50 percent more for Turkmen gas in 2008. Under a deal signed by Alexei Miller, chief of the main Russian gas conglomerate Gazprom, Russia will pay $130 per 1,000 cubic meters (tcm) of Turkmen gas during the first half of next year, after which the price will rise to $150/tcm.
Gazprom needs to ensure steady Turkmen gas supplies in order to honor its domestic obligations, as well as meet its European export obligations. In just over two years, Russia has seen the price it pays for Turkmen supplies skyrocket. In December 2005, Gazprom agreed to buy 30 billion cubic meters (bcm) per year from Turkmenistan at $65/tcm. Less than a year later, Ashgabat raised the price to $100/tcm.
Prior to announcing the latest pricing agreement, Miller complained bitterly about possible US and European Union meddling. "Turkmenstani colleagues informed us about their international contacts in recent months with representatives of the European Commission and the United States, who consistently pushed the thesis that Turkmenistani gas price in the current export contracts was very low with a background of the current European prices and it should be higher," Miller said in a Gazprom statement. "Not surprisingly, our Turkmenistani colleagues raised a question to raise gas export price by no less than 30 percent in 2008."
Editor's note:
Sergei Blagov is a Moscow-based specialist in CIS political affairs.
