Iran, it seems, was calling Turkmenistan’s bluff earlier this summer when Tehran said it no longer needs gas from its northern neighbor. Now a top official says Tehran will keep buying.
That is good news for Turkmenistan, which is so dependent on its main gas customer, China, that it is starting to look like a client state.
Iran is committed to increasing its own domestic gas production to up to a billion cubic meters per day by 2017, a target one industry analyst thinks is possible but unlikely within such a tight timeframe. But supplying Iran’s northern regions with domestic gas is complicated by its lack of infrastructure. So, since 1997, Iran has bought gas from Turkmenistan to service its north, and sold its own gas abroad.
Deputy Oil Minister Hamid Reza Araqi said this week that his boss and Turkmen President Gurbanguly Berdymukhamedov had met in Ashgabat this month to hammer out a new purchase agreement. According to regional news agency AKIpress, the meeting happened November 7.
“The deal makes it possible to raise the amount imported from Turkmenistan in cold months of the winter; starting in the beginning of the current year, Turkmenistan has exported 24-25 million cubic meters of natural gas to Iran [daily],” said Araqi, in comments carried in English by Iran’s Mehr news agency on November 19.
The agreement contains a provision to increase this to 30 million cubic meters daily, he added.
Turkey's Recep Tayyip Erdogan has made his first visit to Central Asia since becoming president earlier this year, to Turkmenistan. And while the headline news from the visit was a deal to supply Turkmenistan natural gas to Turkey, boosting military cooperation likely was on the agenda as well, regional analysts say.
During Erdogan's visit, he signed an agreement with his counterpart, Gurbanguly Berdymukhammedov, to supply gas to the Trans-Anatolian Pipeline (TANAP) project. That project, which is scheduled to be completed in 2018, would take gas from the Caspian shore of Azerbaijan to Turkey's western border. How Turkmenistan would get its gas to the pipeline was left unsaid, but Russia has expressed strong opposition to the idea of a pipeline being built across the Caspian, and should such a pipeline be constructed it would really ramp up tensions on the sea. From a Reuters story on the visit:
[T]o join the pipeline Turkmenistan will have to lay another pipeline across the Caspian Sea.
Asked how Turkmenistan could join the TANAP project, Atagas head Osman Saim Dinc told Reuters: "We are working on all alternative routes." He did not elaborate.
With the arrival of November, the serfs trickle home from Turkmenistan’s cotton fields. But a culture of state employees being forced to labor in menial jobs continues throughout the year, says an annual monitoring report. As they wait for the fields to bloom again with “white gold,” low-skilled municipal workers such as janitors and security guards are obliged to do free housekeeping for Turkmen bureaucrats, and to travel to faraway cities to participate in cleanups for the state, the report alleges.
Turkmenistan’s Central Asian neighbor Uzbekistan is usually the focus of international flak for mobilizing its citizens – notably students – to harvest cotton each fall. But totalitarian Turkmenistan, which produces more cotton per person than Uzbekistan, is just as keen on exploiting its bloated public sector for field hands, according to the October 14 briefing, published by Alternative Turkmenistan News (ATN), a service run by Turkmen exiles who partner with Amnesty International and the Norwegian Helsinki Committee.
Drawing on domestic accounts, the second annual report provides an important insight into Turkmenistan’s labor market. It pays particular attention to Turkmenistan’s low-paid state employees who have limited means to defend their rights in a country where de facto unemployment is high and cowed government workers can be replaced easily.
Turkmenistan marked Independence Day this week. While parts of the gas-rich country were experiencing gas shortages, there was no shortage of pomp and prosperity on display in Ashgabat on October 27. President Gurbanguly Berdymukhamedov was in attendance and some of the choreography – like an Akhal-Teke horse, his favorite breed, drawn out of Kalashnikovs – must have been especially pleasing to the horse-mad leader.
A photographer in Ashgabat sent EurasiaNet.org these images, which are used with permission.
Turkmenistan has the world’s fourth-largest natural gas reserves and exports billions of dollars worth of gas every year. But its copious reserves are apparently not enough to ensure a stable supply for residents of this isolated, totalitarian country.
Shortages in northern villages prompted a rare protest on October 28, reports the Chronicles of Turkmenistan, a news website run by exiles. Several dozen women blocked a highway to draw officials’ attention to the shortages, which come with the onset of autumn and are affecting residents’ ability to heat their homes and cook. The shortages, says Chronicles, have even hit Dashoguz, a town of about 200,000 people:
Residents have repeatedly called on gas providers [for help], but the latter complain that very little gas is being delivered; moreover, the pipes and equipment are very run-down, while specialists capable of maintaining all this in working order are simply nowhere to be found. The authorities are not providing either the funds or the pipes to repair gas mains.
With a cold, dark winter inching closer each day in Kyrgyzstan, the government is desperately trying to strike bilateral energy-import agreements with anyone and everyone. But as policymakers go hunting around Central Asia to plug an estimated deficit of over 2 billion kilowatt-hours, prices and political differences are potent sticking points.
Any bilateral deal would require the differential in electricity costs be borne either by the insolvent government, or by ordinary Kyrgyzstanis, who are accustomed to paying $0.015 per kilowatt-hour. That’s far below the cost of production and substantially less than citizens pay in any other Central Asian country.
So Kazakh electricity, which costs around four times as much for Kazakhs, is expensive to most Kyrgyz, although that didn’t stop Astana and Bishkek agreeing to an import deal in principle last week. Tajik electricity is over one-and-a-half times as expensive as the Kyrgyz version and it is doubtful whether a country whose own rural residents spend a lot of time in the dark has any power to spare.
The perfect cure to a Kyrgyz winter of misery, then, could come from gas-rich Turkmenistan.
Moscow’s sanctions-struck energy giant Gazprom has announced it is no longer interested in buying Central Asian gas, leaving Turkmenistan and Uzbekistan dependent on exports to China.
Contractually, Gazprom officials have noted they are locked into obligations to buy from Ashgabat and Tashkent for the short term. But Gazprom is “working to annul these contracts,” Vsevolod Cherepanov, head of Gazprom’s Department for Gas Production, said at the St Petersburg International Gas Forum on October 7. Cherepanov did not explain the reasons for cutting back on purchases in Central Asia, but noted that Gazprom’s domestic production is expected to increase in the coming years.
According to Gazprom’s website, the official line remains that the production and import of “natural gas from Central Asia and the Transcaucasian region is an important element in the formation of [Gazprom’s] resource base, meeting the demands of Russia’s internal market, CIS countries and beyond. The business strategy of Gazprom in Central Asia rests on a strengthening of its position in this region. This will maintain and increase the share of Russian gas provided to its traditional markets in Europe.”
Gazprom’s exit will leave purchases of Central Asian gas an increasingly Chinese pursuit. In the two years prior to the opening of the China-Turkmenistan pipeline, which went into operation in late 2009, Gazprom imported an average of 63.4 billion cubic meters of gas (bcm) from Central Asia annually, over two-thirds of which came from Turkmenistan. In the years since, the company says, the volume going to Russia has shrunk to an average 34.1 bcm annually, less than a third of which is sourced in Turkmenistan.
The biggest headline to come out of the weekend's Caspian Sea summit in Astrakhan, Russia, was that the five countries along the sea agreed to prevent any outside military presence from the sea. This has been a longstanding goal of the sea's two biggest powers, Russia and Iran, the result of worries that the U.S. and/or NATO would somehow gain a military foothold on the sea via security cooperation programs with Azerbaijan, Kazakhstan, or Turkmenistan.
Russian President Vladimir Putin, summing up the summit's results and formal declaration, said:
The declaration sets out a fundamental principle for guaranteeing stability and security, namely, that only the Caspian littoral states have the right to have their armed forces present on the Caspian. This was the way the situation developed over history, and we do not seek to change it now. In general, only the five Caspian countries that have sovereign rights over the Caspian Sea and its resources will resolve all matters pertaining to the region.
A German national’s successful lawsuit against Turkmenistan’s government after Ashgabat expropriated his poultry farm offers insight into some of the unusual tricks the isolated Central Asian country can hatch on investors.
The Washington D.C.-based International Center for Settlement of Investment Disputes found in favor of Turkish-born German businessman Adem Dogan on August 12, Investment Arbitration Reporter (IAReporter) wrote last month. The amount of the award was not disclosed.
Dogan entered the Turkmen market in 1999 during the reign of the capricious Saparmurat Niyazov—who fancied himself Turkmenbashi, the “Father of the Turkmen.” Working with a local partner, Dogan’s egg farm soon became the largest of its kind in Turkmenistan, a country that sources most of its eggs from neighboring Iran.
According to a 2008 report by Bloomberg, not everyone was thrilled with Dogan’s project. Rather than seeing the farm as a way to ensure food security, Niyazov saw its success as a national humiliation. Citing transcripts of cabinet meetings in the totalitarian country, Bloomberg noted that “Niyazov harangued ministers, asking them why it took a foreigner to run a successful chicken farm.”
The project fell apart after control over the farm’s lease was transferred from the Ministry of Agriculture to the Ministry of Defense. Turkmenistan’s army chiefs “began to pressure the operators for a share of profits, and later, for ownership of the entire firm” with “godfather-style offers,” according to IAReporter’s brief on the court hearings.
Turkmenistan's armed forces have entered the territory of Afghanistan in an apparent effort to drive back Taliban forces that had settled on the border between the two countries, Afghan residents have told the Turkmen service of RFE/RL.
The report is in Turkmen but has been translated into Russian by Alternative Turkmenistan News. It quotes residents of the Qaisar region of Afghanistan's Faryab province saying that Turkmenistan soldiers crossed the border about three months ago and have dug trenches and built fences.
This would seem to be the latest escalation in an increasingly tense situation on the Afghanistan-Turkmenistan border. Earlier, there had been reports of Turkmenistan border guards making incursions in Afghanistan, and the Turkmenistan armed forces carrying out exercises close to the border. But now they seem to be going even farther.
"The Turkmenistanis came here, dug trenches, set up wire fences," one resident told RFE/RL. "No one asked them what they were doing here. The trenches they dug are four meters wide and five meters deep. Besides that, in the same place they are paving a road."
And the Turkmenistan soldiers have apparently blocked access to the area where the villagers had previously grazed their animals. "Now we can't use our pastures like before. We don't have anywhere to graze our livestock, the animals are starving. Turkmenistan has taken what really belongs to us."
Another resident echoed that complaint: "We had grazed our sheep on this land, we had grazed all our livestock there. Let them open a road for us and let us graze our livestock there again."