TURKMENISTAN WARMS TO TURKEY, BUT MAKES NO PLEDGE FOR GAS SUPPLIES

Turkey, located in the middle of the East-West energy corridor, and natural-gas-rich Turkmenistan have recently improved their relations after almost seven years without any high-level dialogue. This development has raised hopes for the revitalization of the long stalled, U.S.-backed Trans-Caspian pipeline (TCP) project aimed at carrying Turkmen gas to Europe via Turkey – and bypassing Russia.

Meeting in Ankara on March 24, Turkish President Abdullah Gul and Turkmen President Gurbanguly Berdimukhamedov expressed their mutual desire to improve bilateral economic and commercial relations.

Despite the absence of a clear public statement by the two presidents concerning possible transit cooperation, Berdimukhamedov and Gul released a joint declaration that cited “energy” as one of the fields in which the two countries would seek opportunities to increase bilateral cooperation (Today’s Zaman, March 25).

Berdimukhamedov is the first Turkmen president to visit Turkey since 1999, when his predecessor, the late Saparmurat Niyazov, was in Ankara. Gul, meanwhile, visited Ashgabat last year in December, the first visit at the presidential level since 2000.

This week’s visit comes after a gap of almost seven years and hopefully will start a new a period of dynamism in bilateral relations, a Turkish Foreign Ministry official told Jamestown on March 26.

The discovery of Azerbaijan’s Shah Deniz natural gas field in 1999, along the route used for gas exports to Greece via Turkey since last year, reduced Turkmenistan’s leverage in negotiations over pipeline inputs for TCP. Thus, the November 1999 intergovernmental agreement laying the legal framework for the TCP route running from Turkmenistan through Azerbaijan and Georgia to Turkey never materialized.

Turkey and Turkmenistan also signed an agreement in 1999 to bring around 16 billion cubic meters of Turkmen gas to Turkey under TCP, but that has never been implemented either.

But now that top-level visits have resumed, energy ministry officials hope the TCP project may finally become a reality.

As a clear indication of the importance Turkey attached to Berdimukhamedov’s visit to Turkey, nine members of the Turkish cabinet were represented at the two presidents’ meeting at the presidential palace (Hurriyet, March 25).

“We have agreed that commercial and economic cooperation – which is one of the most dynamic fields of our bilateral relations – will gain a much more diversified and deepened quality than it has today,” Gul said.

In response, the visiting president expressed his pleasure and satisfaction over his meeting with Gul, saying that the visit served as evidence of improving brotherly ties between Ankara and Ashgabat.

Following the meeting, Turkish and Turkmen officials signed several agreements, including one on intergovernmental economic cooperation.

Along with the steadily improving ties between the two countries, foreign trade has also seen a regular increase in the past three years, according to a statement released by the Turkish presidential palace on March 22.

The trade volume between Turkey and Turkmenistan reached $1.3 billion in 2007, with Turkey realizing $500 million in exports to and $800 million in imports from this country. Turkey is also the leading source for foreign direct investment in Turkmenistan, sending about $1.5 billion in 2007.

While Turkmenistan has been selling most of its gas to Russia, Turkey, the United States, and the European Union (EU) hope that it will supply additional gas volumes to the Nabucco project, which would construct a 3,300 kilometer pipeline through Turkey, Bulgaria, Romania, Hungary, and Austria. The $6.14 billion project could transport 25.5–31 billion cubic meters of gas to Europe annually by 2020.

But Moscow dealt a heavy blow to Nabucco last fall after reaching a deal with Turkmenistan and Kazakhstan whereby those countries’ Caspian gas supplies would flow through Russia, draining the main potential input source for the pipeline.

However, late last year Ankara launched a mediation effort to help resolve a deep-seated dispute between Azerbaijan and Turkmenistan regarding several oil and gas fields in the Caspian Sea, in hopes of clearing the way for additional Turkmen gas to arrive in Turkey via the same route used to transfer gas from the Shah Deniz field.

Turkish Energy Minister Hilmi Guler, meanwhile, does not consider the latest actions by Turkey and Russia to be rival efforts; rather, he see Russia’s South Stream project as being complementary to the EU and Nabucco, saying that a partnership with Russia is always a possibility (Zaman, March 21). Last month, during a visit to Moscow, Foreign Minister Ali Babacan said Turkey was open to including Russian gas in Nabucco (Zaman, March 21).

Meanwhile, renewed Turkish efforts to bring Turkmen gas to Turkey while planning to explore Iraqi energy resources came as Washington intensified its diplomatic effort to prevent Turkey from making new deals with Iran, Turkey’s second-biggest gas supplier after Russia.

In July 2007, Turkey signed new deals with Iran, estimated at around $3.5 billion, which included the exploration of Iran’s Southern Pars gas fields. But those agreements have not yet been implemented.

In the meantime, Turkish energy experts suggest that Turkey should buy oil and gas fields in the Caspian states beyond just Azerbaijan, where the Turkish Petroleum Corporation has shares both in the Shah Deniz gas field as well as in the Baku-Tbilisi-Ceyhan oil pipeline consortium.

“If Turkey wants to be a player and to turn itself into an energy trade center it has to be more active in the Caspian region and that includes buying fields,” an energy ministry source told Jamestown on March 26.