CFR: Which Way Will Turkmen Gas Flow?

Today is running a nice synopsis of the Turkmenistan energy situation following the unexpected death of the “Turkmenbashi.” turkmenistan_sm_2006.gif

Which Way Will Turkmen Gas Flow? December 22, 2006 Prepared by: Carin Zissis Peculiarities marked the career of Saparmurat Niyazov, the hard-line dictator who ruled Turkmenistan for twenty-one years until his unexpected death on December 21 (AP). Even as nearly 60 percent of this gas-rich, largely Muslim Central Asian country lived in poverty, Niyazov funded lavish projects (Guardian), including an ice palace outside the capital, Ashgabat, and a manmade lake in the middle of a desert. But the self-obsessed Niyazov, architect of one of the world’s most bizarre personality cults, failed to name a successor. This raises questions about the prospects of a reprieve for the country’s beleaguered citizens, and leaves in doubt Europe’s energy security (FT). Obituaries have emphasized that Niyazov—known as Turkmenbashi, or ruler of all Turkmen—governed the nation with the fifth largest national gas reserves (BBC) in the world. His decision to invest in gilded statues of himself rather than infrastructure left Turkmenistan reliant on Soviet-era pipelines run by Gazprom, Russia’s largest company and the world’s biggest natural gas producer. Only Russia and Iran directly purchase gas from Turkmenistan (map). But the broader importance of the Central Asian energy source was underscored during a near crisis last winter. In a January 2006 gas price row with Kiev, Moscow cut off supplies to Ukraine and European deliveries were also imperiled. A complex deal provided Ukraine with adequate, and relatively cheap, supplies from Turkmenistan (RFE/RL). Niyazov spent the past few years working up pipeline agreements to try to end dependence on Russia . One plan involved plugging into the Nabucco pipeline (, running from Azerbaijan through Turkey and five EU countries, to weaken Russia’s control on European gas supplies. Radio Free Europe/Radio Liberty reported that during German Foreign Minister Frank-Walter Steinmeier’s visit to Ashgabat in November, Niyazov informed him that a new giant gas field had been discovered in Turkmenistan and invited Germany to participate in pipeline construction. In April 2006, China and Turkmenistan signed an agreement in which Beijing agreed to fund a pipeline that would potentially threaten Gazprom’s regional standing (PDF), writes Eurasia expert Kathleen J. Hancock in the China and Eurasia Forum Quarterly . Still, Gazprom succeeded in reasserting control (Asia Times) over Turkmen gas in a September deal that guaranteed Ashgabat a 50 percent price increase. Niyazov’s death now raises questions over where the gas may end up. A Statfor report suggests keeping an eye on whether Russia and Iran clash over shared claims for the resource. There is also speculation about whether the dictator’s death could shed light on the murky world of natural gas deals in Eurasia. Turkmen gas travels to Ukraine through Gazprom’s pipelines by intermediary companies, which lack corporate oversight, according to an April report by London-based watchdog group Global Witness. While neighboring countries worry over gas supplies, the direction for this nation of five million people remains unclear. The government is deeply corrupt—ranking 142 out of 163 countries in Transparency International’s annual Corruptions Perceptions Index —and its citizens isolated by clampdowns on press freedom. The Committee to Protect Journalists reports that only the country’s wealthy—who have satellite dishes—can access foreign news. Only North Korea garnered a worse press freedom ranking from Reporters Without Borders. The U.S. State Department said Turkmenistan’s government in 2005 carried out “serious abuses and its human rights record remained extremely poor.”