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TURKMENISTAN


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 6,010 7,672 4,000 110
         
GNI per capita
 US $ 1,120 1,200 950 131
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 359 - (24/11/10)

A climacteric at hand
Turkmenistan used to be under the total domination of Russia. All of its gas, by far its main commodity, went abroad via Russian pipeline facilities. But Russia stopped buying Turkmen gas for most of last year after a collapse in world demand and an explosion on the main pipeline connecting the two countries. A potential route through Iran has been stalled as companies are wary of international sanctions.

Now Turkmenistan has said it would negotiate with Azerbaijan on a pipeline across the disputed Caspian Sea, potentially allowing exports to Europe, via non - Russian routes.

The Baku summit
Turkmen President Gurbanguly Berdymukhammedov told his Russian, Kazakh, Iranian and Azeri counterparts at a November summit on the delineation of the Caspian Sea in Baku, Azerbaijan, that the two countries had the right to build a link across their own territorial waters without the approval of other states, i.e. without the say so of Moscow.

The Caspian littoral states have yet to agree on the legal status of this immensely precious body of water, which is important to determining what approvals projects require and within what framework commercial entities can invest. The European Union has pushed to include Turkmen gas in Southern Corridor transit plans, which aim to diversify the 27-nation bloc’s imports away from reliance on Russia by building links through Turkey.

“Europe has no need to worry,” Baymurad Hojamuhammedov, deputy head of Turkmenistan’s Cabinet of Ministers, said in the capital Ashgabat, regarding the availability of potential gas volumes.

Turkmenistan is building infrastructure with 40 billion cubic meters capacity to transport gas west, Hojamuhammedov said. A 30 billion cubic meter capacity East-West pipe from the country’s vast gas reserves in the east to the Caspian coast in the west is already under construction, he said.
Petronas Caspian Project

Russia, Turkmenistan’s traditional buyer via Soviet-era infrastructure and the world’s largest gas exporter, has reduced purchases from 40 billion cubic meters in 2008 to about 10 billion cubic meters this year.

Hojamuhammedov would not say how much gas Turkmenistan would supply China this year after opening a pipe east in 2009. It plans to export 17 billion cubic meters next year, he said.

Border Disputes
The Caspian pipe talks will be taken as a separate issue from border disputes between the two nations over areas with large amounts of tapped and potential oil and gas resources, Hojamuhammedov said.

Part of the BP Azerbaijan-led Azeri-Chirag-Guneshli project lies in waters claimed by both Turkmenistan and Azerbaijan, as does a yet-to-be-tapped block, which Turkmenistan awarded to Canadian explorer Buried Hill Ltd.

The EU has sponsored talks urging Azerbaijan and Turkmenistan to display the political will to work with each other on pipeline projects as well as describe their own rights and the rights of companies within their waters apart from the border dispute.

The Turkmen president’s statements are “very encouraging” for transit projects from the region to Europe, said Olav Skalmeraas, a Statoil ASA vice president for natural gas.

Statoil is a partner in the Azeri Shah Deniz gas field which will make a final investment decision on a $20 billion second phase by mid next year, he said. The investment decision is contingent on deals to buy the gas which in turn will be necessary to determine a transit route, he said.

With Turkmenistan involved, there may well be enough gas for several pipeline projects, which are currently competing for gas from Shah Deniz, the only resource to fill their pipes currently ready for sales deals, he said.

OMV AG-led Nabucco, Edison SpA’s Interconnector Turkey- Greece-Italy and the Trans Adriatic Pipeline have all sought gas produced and sold by the BP Plc-led field.

The Turkmen reach on the Caspian
Apart from precious fish stocks, the Caspian Sea holds an estimated 5 billion tons of oil and 8 trillion cubic meters of natural gas. It has a cornucopia of resources.

Unfortunately, work to develop these resources is being held up by disagreements among the five Caspian powers- Russia, Iran, Kazakhstan, Azerbaijan, and Turkmenistan. The emergence of the latter three in 1991 made decisions on who owns what in the Caspian Basin increasingly difficult.

At a summit in Ashgabat in Turkmenistan in 2002, the five Caspian powers made an attempt at solving the problem. The bargaining did not resume until 2007, when Russia, Azerbaijan and Kazakhstan carved up the northern part of the seabed. Further carve-ups, including of the water mass, are yet to be agreed. Iran proposes five equal parts. Azerbaijan objects. It remains locked in a dispute with Turkmenistan about a dividing sea border.

The Caspian condominium
At a presidential summit in Baku which ended on November 18, the five Caspian states agreed, among other things, to safeguard security in the Caspian Basin without help from outside powers.

As Russian President Dmitry Medvedev put it: "We are unanimous that the situation in the Caspian region is the responsibility of the Caspian powers. Agreements of this summit clearly state that only these powers can enforce security in the area. In the case of weakening of our control; other countries will surely be quick to move in. They actually have nothing to do with the Caspian region but may try to seek benefits in it."

The five Presidents decided to give their diplomats three months to come to an agreement about national economic zones in the Caspian Sea. They hope this would lead to a final deal on the Caspian. The sides also agreed to introduce a five-year moratorium on catching sturgeon.

The Presidents agreed to hold such summits each year. Experts from the five sides will be meeting at least five times a year. The next Caspian summit is to take place in Moscow in 2011.

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