UZBEKISTAN, TURKMENISTAN EYE STRONGER PARTNERSHIP BASED ON ENERGY NEEDS

On March 10-11, Turkmenistan’s President Gurbanguly Berdimukhamedov visited Uzbekistan, Central Asia’s most populous country, where he was greeted by Uzbek President Islam Karimov. The visit was intended to further develop ties between the two countries, Karimov commented. In response, Berdimukhamedov hailed Turkmenistan and Uzbekistan’s “constructive relations, based on mutual interest and respect” (Interfax, Turkmen TDH news agency, March 10).

During the visit, Uzbekistan and Turkmenistan signed several agreements, including a bilateral statement of principles and an agreement on agricultural cooperation. Both leaders exchanged ratification notices regarding the bilateral treaty signed on October 18, 2007, during Karimov’s visit to Ashgabat (Interfax, March 10).

After their talks, Karimov and Berdimukhamedov also hailed a new blueprint for bilateral economic cooperation in 2008-2012, and also praised the session of intergovernmental commission on economic cooperation held in February 2008 (Interfax, Turkmen TDH news agency, March 10).

Bilateral relations had been somewhat chilly before the death of Turkmen President Saparmurat Niyazov in December 2006. Therefore, during Berdimukhamedov’s term in office economic ties between Uzbekistan and Turkmenistan have been growing fast, but they start from a very low level. In 2007, trade between the two neighboring countries reached around $69 million, about 70% higher than in 2006, the highest level of official bilateral trade to date (Interfax, March 10).

There are only ten small Uzbek-invested firms in Turkmenistan, although both sides discussed plans to set up new joint ventures. These could include companies to sell and service in Turkmenistan UzDaewoo cars as well as Isuzu-type trucks produced by Uzbek firm SamAuto. Meanwhile, the 2,000-kilometer border between Uzbekistan and Turkmenistan remains a zone for smuggling Turkmen oil products and Uzbek consumer goods (Nezavisimaya gazeta, March 12).

Not surprisingly, Karimov conceded that both countries were yet to fully utilize the potential of bilateral cooperation. According to the bilateral statement released in Tashkent, neither side is satisfied with the existing volume of bilateral trade and the current number of joint ventures. The statement also suggested developing cooperation in energy, agriculture, chemical products, as well as in the joint use of water resources (Turkmen TDH news agency, Uzbek UzA news agency, March 10).

The presence of Turkmens in Uzbekistan and Uzbeks in Turkmenistan necessitates further development of humanitarian cooperation, the statement said. There are already Turkmen cultural centers in Tashkent and other Uzbek regions, as well as schools teaching the Turkmen language (Uzbek UzA news agency, March 10).

Both sides reportedly agreed that Uzbekistan and Turkmenistan have good opportunities to set up energy consortiums and to develop international oil and gas transit routes, including construction of new pipelines. Uzbekistan and Turkmenistan currently cooperate in developing the Prikaspiisky gas pipeline system (Uzbek UzA news agency, March 10).

Russian observers claim that ties between Uzbekistan and Turkmenistan are largely driven by energy considerations. Uzbekistan is an important transit state for Turkmenistan, because parts of the existing Central Asia – Center gas pipeline network, as well as the planned gas pipeline to China, both pass through Uzbek territory, according to Nezavisimaya gazeta. However, Uzbekistan and Turkmenistan still struggle to agree on the joint use of water from the Amu Darya River, as well as on how to share the Kokdumalak gas condensate deposit near the border between the two states (Nezavisimaya gazeta, March 12).

Turkmenistan is the largest natural-gas producer in Central Asia. Its gas reserves were estimated at some 5.5 trillion cubic meters of gas, while Turkmen officials claim the country’s deposits could contain up to 22 trillion cubic meters of gas.

Turkmen authorities intend to use the gas reserves on the right bank of the Amu Darya River to fill the Turkmenistan-China gas pipeline. In April 2006, President Niyazov and Chinese President Hu Jintao signed a framework agreement on oil and gas cooperation. China pledged to purchase 30 billion cubic meters (bcm) of natural gas annually at the Turkmenistan border over a 30-year period. However, the pipeline project – once expected on stream in 2009 – has proved slow to materialize. Disagreements between Uzbekistan and Turkmenistan about how to share gas deposits near the border are understood to be a factor delaying the Turkmenistan-China gas pipeline.

Incidentally, as Karimov and Berdimukhamedov held talks in Tashkent, Russia agreed to raise gas prices for Turkmenistan, Kazakhstan, and Uzbekistan up to European levels (see EDM, March 17). On March 11, top executives of Gazprom, KazMunayGaz, Uzbekneftegaz, and Turkmengaz met in Moscow and reportedly agreed to introduce new prices from 2009 on. By offering Central Asian gas producers international prices, Moscow hoped to outmaneuver competing pipeline projects, notably the planned Trans-Caspian link.