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The Turkmen Balancing Act

turkmen1.jpgNobody really knew what to expect when the Turkmenbashi, Saparmurat Niyazov, died last year – such is the confusion and opacity of closed societies. With the appointment of the new president of Turkmenistan, the former dentist and health minister Gurbanguly Berdymukhammedov, a lot of people were guessing in which direction would the country lean – toward an opening to the West or into the waiting embrace of Moscow? Surely Beijing isn’t asleep at the wheel with its its energy interests in Central Asia either. The geopolitical ramifications of Turkmenistan’s foreign relations cannot be underestimated – sitting atop one of the world’s largest natural gas deposits, Ashgabat is a key regional energy player which has the power to really tip the scales. So far, we have seen nothing but confirmation that Berdymukhammedov understands this as well as anyone, and his decisions indicate that the Turkmen strategy will continue to dance and balance in order to extract the maximum concessions from her many suitors. Tomorrow, as hundreds of foreign officials flock to an oil and gas conference in Central Asia, all eyes are on Berdymukhammedov’s next moves. The FT has got the story….

Excerpt from the FT: Turkmen oil manoeuvres evoke Great Game

Gurbanguly Berdymukhammedov, the new president and Niyazov’s former personal physician, has invited international oil majors to bid to develop the country’s Caspian Sea oilfields, providing a rare opportunity for an industry short of new reserves.His support for a policy to build gas export pipelines in multiple directions has also unleashed an international race for access to gas resources thought to be among the world’s largest.In the past six months Mr Berdymukhammedov has approved a plan to boost gas supplies to Russia through a new northern pipeline and inaugurated construction of a pipeline east to China to break Russia’s stranglehold on gas export routes out of central Asia.Talks have also resumed with western governments about a planned pipeline across the Caspian Sea to carry central Asian gas to Europe, a project which stalled in the Niyazov era.“We have declared ourselves open to the outside world and we have taken some steps to show it,” says a Turkmen diplomat.Analysts have compared the competition between Russia, China and Europe for access to the country’s gas resources to the 19th century Great Game, when the British and Tsarist empires vied for control of central Asia.Western oilmen say Turkmenistan is playing crafty politics, using pipelines as bargaining chips to maximise interest in its resources.Russia is expected to remain the dominant route for Turkmenistan’s gas exports, but the prospect of competing pipelines appearing on the map will strengthen the republic’s hand in price negotiations.Russian compliance with Turkmenistan’s demand for a 40 per cent gas price increase next year could help to smooth the way for the finalisation, already postponed twice, of a project to build a pipeline to Russia by 2012.China, an aggressive competitor for central Asian resources, has set 2009 as the completion date for a 7,000km pipeline from Turkmenistan to Shanghai that it is both building and financing.US and European diplomats are pressing Turkmenistan to support construction of the trans-Caspian pipeline, a crucial link in the EU’s strategy to reduce dependence on Russian gas. Those expected to attend this week’s conference include Samuel Bodman, the US energy secretary, and Andris Piebalgs, EU energy commissioner.