Turkmenistan’s Gas Industry: Continuing To Thrive Despite Global Energy Insecurity

Via Eurasia Review, an interesting analysis of Turkmenistan’s gas industry:

At a time where global energy insecurity is high, an energy rich country such as Turkmenistan would be expected to be in near turmoil.

The reality is the opposite for the Central Asian nation, however, as its gas sector continues to be the source of growing relations between Turkmenistan and a variety of other states.

Since August, Turkmenistan’s Government has engaged in high level meetings with representatives from countries including Japan, Tajikistan and Kazakhstan.
Further, its Government has also held talks with influential US business figures and have undertaken initiatives that are set to strengthen its relations with India.

The Regional Level

Turkmenistan was been profoundly isolationist under the post-Soviet dictatorial regime of the late Sapamurat Niyazov, something which has continued under his successor, Gurbanguly Berdimuhammadov.

However, the country’s recent diplomatic efforts suggest that may changing, albeit to a small degree.

In August, President Berdimuhammadov hosted Tajikistan President Emomali Rahmon in Turkmenistan’s capital Ashgabat, which signalled the growing relations between the two Central Asian nations.

Both countries, along with Afghanistan, are currently overseeing the construction of the Turkmenistan-Afghanistan-Tajikistan railway line, which could yield major potential economic benefits for Turkmenistan.

Turkmenistan and Tajikistan also continue to oversee the construction of a gas pipeline from Turkmenistan to China which passes through Tajikistan and Kyrgyzstan. This is a highly important project for Turkmenistan given that China is set to import 40 billion cubic metres of gas from the country this year alone, an amount that is set to rise in the near future.

Berdimuhammadov also met Iran’s Industry, Mines, and Trade, Mohammad Reza Nematzadeh in Ashgabat in August just months after an official visit by Iranian President Hassan Rouhani.

Turkmenistan also played host to the Turkmen-Kazakh business forum in late-August. The forum, which was attended by high level business and government figures from both countries, sought to provide both nations with an avenue to explore further bilateral trade and economic opportunities.

Both countries share a common bond in the fact that they are both large-scale gas exporters, while also having different smaller industries which could lead to new markets in both nations.

The motivation for Turkmenistan seeking closer regional cooperation is not only limited to economics.

While economics is a primary factor, another key reason lies behind Turkmenistan’s desire to further develop relations with its neighbours – growing instability near the country.

Hostilities in Syria and Iraq continue unabated, which in turn continues to lead to an exodus of refugees along with constant global attention and instability.

Russia, on the other hand, has become somewhat of a global pariah over the last two years following actions it has carried out in the Ukraine.

Domestic actions the Russian Government has taken, such as a clampdown on homosexual rights and the implementation of the Undesirable Organisations Law, have also cast Russia in a highly negative light internationally.

Both Russia and the effected Middle Eastern areas are far away enough from Turkmenistan that the government does not need to go in a ‘crisis mode’.

However, they are close enough to Turkmenistan to worry its government and motivate it into taking action to safeguard the country and its lucrative natural gas sector.

Close cooperation between Turkmenistan and its immediate neighbours can help give the country’s government some degree of confidence that its gas industry and primary export markets are safe.

This is particularly the case for Iran, which acts as Turkmenistan’s geographical buffer to Iraq and Syria, and Kazakhstan, which acts as the country’s geopolitical buffer to Russia.

By maintaining positive and fruitful relations with neighbouring countries such as Tajikistan, Kyrgyzstan and Afghanistan, Turkmenistan ensures that its gas supplies to two of its largest and most significant customers, India and China, will continue without interruption.

The Global Level

In May, President Berdimuhammadov undertook a European diplomatic tour in which he held meetings with the Italian Prime Minister Matteo Renzi, Austrian President Heinz Fischer and Slovenian President Borut Pahor.

In August, the Chinese Vice Foreign Minister and Turkmenistan’s Deputy Foreign Minister presided over the fifth session of the Security Cooperation Subcommittee of the China-Turkmenistan Cooperation Committee.

Both countries agreed to strengthen their security initiatives, which included joint cooperation in combating drug trafficking and other organised crime. Such bilateral actions complement both China and Turkmenistan’s growing economic and trade relationships, which is largely centred on natural gas.

China is not the only Asian nation that Turkmenistan has sought to strengthen relations with in recent times. One of Turkmenistan’s primary gas bodies, Turkmengas State Concern, held meetings with high level representatives from some of Japan’s largest corporations, including Mitsubishi, Sojits and JGC at the beginning of September.

These talks centred on Turkmenistan’s gas industry, namely gas purification and how the aforementioned Japanese companies could play a role in purifying the country’s gas.

The US has also been proactive in enhancing its bilateral relations with Turkmenistan as of late. Turkmenistan-US Business Council Executive Director Eric Stewart visited President Berdimuhammadov in Ashgabat to discuss potential opportunities for bilateral trade and economic cooperation.

Despite growing instability in the global energy sector, Turkmenistan remains favoured by major nations as natural gas continues to be in relatively high demand. While oil is in a current global state of oversupply, this is not the case for gas, and as such Turkmenistan remains firmly at the forefront of global energy security needs.

The stability of an energy supplier is a high priority for nations seeking large-scale and long-term supplies. Turkmenistan satisfies this criterion given that it has had just two leaders in the nearly 24 years it has been independent from the former Soviet Union.

Former President Niyazov became Turkmenistan’s head of state in the aftermath of the Union’s fall and passed away in 2006 while in power. He was then replaced by Berdimuhammadov, who had ruled the country in the same, albeit far less eccentric, style as his predecessor.

Although both leaders are widely seen as being autocratic, they have made Turkmenistan a stable nation in a region with a reputation for instability. This has helped made the country appealing to gas importers, and Turkmenistan is set to play a prominent role in addressing nations’ needs for gas as a result.

This entry was posted on Thursday, September 10th, 2015 at 5:26 am and is filed under Turkmenistan.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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