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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: 361 - (26/01/11)

Over the past two months, Turkmenistan has courted South Asia and Europe as new customers for its natural gas in a move that could shake Russia's dominant position in the market.

On December 11, Turkmenistan signed an agreement with Pakistan, India and Afghanistan to commit to supplying the proposed Trans-Afghanistan Pipeline Project, also known as TAPI. The 1,680-kilometre pipeline would carry an estimated 33 billion cubic metres of Turkmen gas to South Asia every year.

Turkmenistan is anxious to cash in on its huge natural gas reserves, and Pakistan and India badly need additional energy resources. Turkmen President Gurbanguly Berdymuhammedov said the project “should serve as an example of how the principal objective – assuring a balance of interests of energy producers, transit countries and consumers – can be achieved, as long as there is the political will and a constructive attitude".

But despite large doses of good will from all of the countries involved, the proposed pipeline route is risky. Investors will likely shy away from putting their money into an infrastructure project that goes through war-torn Afghanistan, and relies on good relations between India and Pakistan.

Afghan President Hamid Karzai promised to "put in efforts to ensure security both during construction and after completing the project," and the country's Mines and Industry Minister, Wahidullah Shahrani, confirmed that, "5,000 to 7,000 security forces will be deployed to safeguard the pipeline route." That might not be enough. The pipeline is supposed to go through Kandahar, a Taliban stronghold. Shahrani has said he's confident that local residents will support the project because it will deliver jobs and new sources of power and heating. But the Taliban are unlikely to want the government-backed project to encroach on their turf and might try to prevent the pipeline from ever getting off the ground.

The pipeline would also go through Pakistan's volatile Baluchistan region, where militants are in the midst of a violent campaign for independence. For years, ethnic Baluchis have targeting officials, teachers, students, and all non-Baluchis who try to settle or work in the region. While there has been much talk about securing the TAPI pipeline in Afghanistan, little has been said about security along the line in Baluchistan, although Pakistani officials have proposed slightly altering the pipeline's route to take it through more secure Pashtun-inhabited areas of Baluchistan.

The fate of the project is far from sealed, and some political analysts argue that Turkmenistan is merely using TAPI as a bargaining chip to encourage its existing gas customers to move more quickly on other export routes. On January 14, top European Union leaders visited the capital, Ashgabat, to step up its pressure to build a pipeline running from Turkmenistan to Europe.

Europe is keen to move on several proposed pipeline projects in an effort to bypass Russia and avoid the periodic shortages that occur when Moscow falls out with Belarus and the Ukraine – through which most Russian gas is transported to Europe. Those projects include a pipeline from Turkmenistan to Azerbaijan under the Caspian sea (no small enterprise), that would feed into the proposed Nabucco line and be transported on to south-eastern Europe through Turkey.

The day before travelling to Ashgabat, European Commission President Jose Manuel Barroso and Azerbaijani President Ilham Aliyev signed a joint declaration that commits Azerbaijan to providing "substantial" long-term gas supplies to EU countries. If the EU can get Turkmenistan to the same thing, Europe will at last have energy security.

But how likely is that? The Russian energy firm Gazprom currently has control over most Turkmen gas exports, besides which there are exports to Iran and China. According to an energy expert in Turkmenistan, Burdymuhammedov is trying to persuade potential customers that they should share the burden of risk associated with building the necessary infrastructure and is keen to follow in the footsteps of Azerbaijan, which escaped Russia's sphere of influence, once it had secured funding for the Baku-Ceyhan oil pipeline. The West is keen to throw money at new projects that by bypass Russia, and Turkmenistan is fast losing its loyalty to Gazprom.

Moscow has announced that it plans to buy just ten billion cubic metres of gas from Turkmenistan this year, instead of the 40 or 50 billion it used to take, and isn't doing its best to curry favour with the Central Asian state. The doors of competition between the two energy-rich states are starting to open up.

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