UPSURGE OF WESTERN INVESTMENT IN TURKMENISTAN

. The European Union’s coordinating office in Ashgabat yesterday endorsed Turkmenistan’s economic reform program for 1996. The program’s main features include implementing price deregulation as of January 1, ending state subsidies to unprofitable enterprises, moving toward privatization, and lowering the budget deficit to 1 percent of GDP. Also yesterday, the European Bank for Reconstruction and Development and Deutsche Bank committed $18 million and $24 million, receptively, to business activities in Turkmenistan. The EBRD loan goes to a large textile joint venture, the first in which the ownership of foreign partners broke a 49 percent ceiling in effect until recently. (16)

Executives of the U.S. company UNOCAL yesterday announced plans to build oil and gas pipelines from Turkmenistan to the Indian Ocean via Afghanistan. The projects, at an estimated cost of $8 billion, will build terminals on Pakistan’s Indian Ocean coast. The gas pipeline, 1,271 kilometers long with six compressor stations and a daily throughput capacity of 2 billion cubic feet, is projected to cost $3 billion. The pipeline will be a joint venture of UNOCAL and Saudi-based Delta Oil, and will carry gas from Turkmenistan’s Davlatabad Field. The oil pipeline, 1800 kilometers long from Turkmenistan’s Charjou oilfield to Pakistan’s Gwadar maritime terminal with a daily throughput capacity of 1 million barrels, is projected to cost $5 billion. UNOCAL would prefer to build both pipelines at the same time to reduce construction costs. (17)

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