TURKMENISTAN AND TURKEY AGREE TO MASSIVE GAS DEAL, STRENGTHEN OVERALL TIES.

On a visit to Turkey this week, Turkmen president Saparmurat Niazov agreed with his counterpart Suleyman Demirel to sell Turkmen gas to Turkey on a massive scale. A memorandum of understanding signed by the two presidents envisages the delivery to Turkey of 227 billion cubic meters of gas from 1998 to the year 2020; the annual rate delivery rate is planned to grow from 2 billion in 1998 to 15 billion cubic meters by the year 2010. Gas deliveries will initially be made through an existing pipeline via Georgia which has an annual capacity of up to 10 billion cubic meters, but requires some upgrading. After the year 2005, larger volumes of gas will be piped via Iran. The memorandum of understanding also gives Turkey’s state oil company TPAO a license to develop a 20-million ton oilfield in Turkmenistan. Turkish investment in Turkmenistan is currently reported at more than $1 billion.

The presidents also signed a protocol on the principles of long-term cooperation in areas ranging from education to military training. Demirel in his public remarks encouraged Turkmenistan to pursue secularism and modernization. He is scheduled to pay an official visit to Turkmenistan in May. (13) Turkmenistan has the world’s second largest gas deposits after Russia and also possesses large oil deposits, the size of which has yet to be fully estimated. The country’s lack of access to international markets has thus far discouraged western investment to exploit its oil and gas deposits, keeping Turkmenistan’s output well below its current capacity and retarding the country’s economic development. The agreement with Turkey may produce a breakthrough in both respects. Because of its geographic position, Turkmenistan’s lifeline to international markets passes through neighboring Iran. And while it seeks to use the Iranian route for commodity transport, Turkmenistan values its ties to Turkey and esteems the latter’s secular model of development.

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