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ZERKALO NEDELI: GAS BATTLE
n the energy map of the world, Eurasia is one region where the global hunt for energy sources carries on unabated. All the regional players can be categorized either as “hunters”, “predators” or “prey”. Traditionally, global “hunters” have been the USA, EU, China and India, whose continued economic operation and development would be impossible without imported energy resources. The role of “prey” has been played by the Middle Eastern, Central Asian and Caspian states that possess energy resources. Among them, Turkmenistan stands out as the world’s third biggest gas field. The country is currently producing 68 billion cubic meters of gas per year (2006 projection); it is expected to raise production to 120 billion cubic meters by 2010 and to double the latter volume by 2020. At present, Turkmenistan also produces 9 million tons of oil annually, while the late President had planned to boost this indicator to 48 million tons by 2010 and to 100 million tons by 2020.
Hovering over this Central Asian state is the “predator” who has managed to take almost total control of Turkmen gas resources over the last three years. With the death of the Great Serdar (leader) of all Turkmen on Thursday, 21 December, a lack of clarity increases risks for the Russian Federation. On Friday, 22 December, Vladimir Putin was in Kyiv, but his thoughts were in Ashgabat.
In November, Russian governmental analysts prepared a report for their President on the reduction in Russian gas reserves starting next year. They estimate the 2007 shortage of gas to amount to 4.2 billion cubic meters. The long-term forecast is gloomier still: by 2010 the shortage will approximate 27.7 billion cubic meters, and by 2015, 46.6 billion cubic meters. At a meeting of the Russian government held on 23 November, Prime Minister Mikhail Fradkov indicated that the challenge of decreasing power supplies is “complex and long-term”. Neither the current production level, nor the development of new deposits in Russia guarantees that GASPROM will be able to fulfill all of its obligations. Back in April, A.Riazanov, ex-Vice CEO of GASPROM, claimed the company had no new major gas deposits left. Some Russian experts predict that in the next three to four years GASPROM will have problems maintaining its gas balance.
Hence the Russian Federation’s hectic activity vis-a-vis Turkmenistan, its gas and pipes over the last three to four years. Moscow has anticipated the impending problems and has been looking to Central Asian gas, first and foremost from Turkmenistan, as a salutary solution. According to the Russian-Turkmen agreement on natural gas supplies (valid for 25 years), Turkmenistan is to supply 70-80 billion cubic meters of gas per year, at least until 2009.
Thus, Russia will be doing its best to preserve its status quo in Turkmenistan at any cost; otherwise, in case of another long and bitter winter with 40 degrees of frost, the country could fold and default on its obligations to supply gas not only to the EU countries, but also to the domestic market.
Yet Russia is not the only country that will be trying to shape the situation in post-Niyazov Turkmenistan. Washington, Brussels, Beijing, Teheran and Ankara are also writing their scenarios and designing models of catching the “prey”. In principles, the above states are interested in Turkmenistan’s stability and civil peace, which is clearly testified by the official statements made in the world’s leading capitals on Thursday. However, it is the “concern” for Turkmenistan’s stability that could eventually destabilize it, not only because the Turkmen society is living through the so-called “1953 effect” (as for the majority of the country’s population Niyazov’s death is as crushing a blow as Stalin’s death was to most Soviet people), but also because different world powers understand Turkmenistan’s stability differently.
Moscow wants to tighten its embrace of Ashgabat in the hope that it will be easier to bring pressure to bear on the new rulers than it was on the wayward Father of all Turkmen. For example, they could be more responsive to the idea of founding Gas-OPEC, particularly if their Russian counterparts resort to the popular “Putin cocktail” of political pressure, corruption and blackmail shaken by skillful secret services.
Beijing looks forward to the implementation of the general agreement on developing gas deposits, building a Turkmenistan-China gas pipeline and supplying 30 billion cubic meters of Turkmen gas to China per year starting 2009. The agreement was signed on 3 April 2006. China will also strive to secure a contract for developing shelf oil-and-gas deposits in the Turkmen sector of the Caspian Sea coastline. Teheran will associate stability in Turkmenistan with Islamic rule and enhanced cooperation in the gas industry. Ankara will be concerned not only about retaining Ashgabat within the sphere of Great Turan but also about strengthening pan-Turkic orientation while weakening pro-Iranian ones, as well as about channeling gas to Turkey via the Caspian Sea region and the Southern Caucasus. Washington and Brussels will hurry to reanimate the Trans-Caspian project, enabling Turkmenistan to sell gas on European markets without GASPROM’s mediation. The late Turkmen leader and his entourage were always in favour of this project as they dreamt of gas prices that would be much more attractive than the GASPROM ones. For those dreams to come true, a direct access to European market was necessary.
Some would argue that Turkmenistan’s democratic development is also an option: there is an opposition, albeit fairly heterogeneous, disunited and operating beyond the land of gas, cotton and sand. Or course, it could risk returning to the country and being repressed by the totalitarian regime, which may well outlive its founder. Democratic scenarios for Turkmenistan are unlikely to materialize since gas, notwithstanding its volatile nature, will prevail over democracy, not only from Russia’s perspective (which is not surprising at all) but also from that of Europe and the USA. That is understandable, given the high prices of energy resources, and the fresh memory of last winter’s gas wars in Europe. Everyone seems happy with the status-quo in Turkmenistan. So everyone will work toward preventing other parties from taking over the local gas resources, which could undermine the fragile internal peace that used to be rooted in Niyazov’s domination over numerous clans.
In the context of the dialogue between Moscow and Brussels, which took on a somewhat dramatic shade after the Russian-Ukrainian gas conflict last January, the European Commission made a correct but belated step. Pierre Morel, EU Special Envoy for Central Asia, and Astrid Wolf, German Charge d’Affaires in Turkmenistan, met with Saparmurat Niyazov in Ashgabat on 18 December. Brussels voiced its concern over the EU inability to purchase gas directly from the former Soviet Republics, since all the gas had been sold to the Russian Federation. They also discussed the Trans-Caspian pipeline project, which, once realized, would allow Turkmenistan more freedom in export policy and an access to the EU market. Moscow fears the latter prospect and is closely watching the regional developments, in particular Germany’s intensified activity in Central Asia. On 2 November, German Foreign Minister Frank Walter Steinmeyer paid an official visit to Ashgabat and met with the Turkmen President. Brussels planned to draft a special memorandum on strategic cooperation in the energy sector with Turkmenistan, analogous to those with Azerbaijan, Kazakhstan and Ukraine – countries with considerable energy resources or transit-potential capable of affecting the security of the EU’s energy resources. Now the signing of this memorandum is a toss-up.
What about Ukraine? The country used to hold a very strong trade and economic position in Turkmenistan in the early 1990s but has since surrendered it. Since 2003 it has been following the GASPROM lead in the region. Today its chances could improve but it is unlikely to regain is former standing: Turkmenistan views Ukraine as an outsider acting in the shadow of RosUkrEnergo. Kyiv should cooperate with Brussels in building a platform for influence in this small country, critical for the uneasy energy peace in the world, so as to preclude the turbulence following the Turkmen leader’s demise from growing into a Eurasian gas tornado with a “domino” effect.
Serhiy DANYLOV
“Zerkalo Nedeli”, Ukraine’s International Social Political Weekly, 23 – 29 December 2006
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