At a time when gas-rich Turkmenistan could be pushing to diversify its export paths, it is instead allowing itself to be pulled back into Moscow’s energy orbit, experts say.
Russia is no longer the top buyer of natural gas from Turkmenistan, a country that is believed to depend on the fuel for three-quarters of its state revenues.
The main purchaser is China, which displaced Russia more than a decade ago and currently imports around four times as much gas from Turkmenistan as Russia does.
But if Beijing has traditionally been businesslike in its energy-trade relationship with Ashgabat, Moscow’s relations are more likely to involve political calculations.
This is especially the case as the Kremlin looks to forge new gas alliances after Europe made dramatic cuts in its imports of Russian gas amid the fallout of Moscow’s yearlong invasion of Ukraine.
“Looking at the bigger picture, Turkmenistan is perhaps the only non-Russian source of natural gas that has the potential to make the European Union’s energy transition more efficient and less expensive,” Annette Bohr, an international affairs expert at Chatham House, told RFE/RL.
“But Ashgabat is clearly coming down on the side of Russia and spurning opportunities to move its gas in a Western direction. It has chosen to move towards its authoritarian brothers-in-arms, Russia and Iran — a policy that serves to safeguard its need for isolation,” said Bohr.
Gazprom chief Aleksei Miller’s February 15 visit to Ashgabat, where he met with both President Serdar Berdymukhammedov and Turkmenistan’s newly crowned “Leader of the Nation,” Gurbanguly Berdymukhammedov, was his second in the last six months.
Russia has upped imports of natural gas from Turkmenistan from a low of zero in 2016 to around 10 billion cubic meters (bcm) per year in 2021, even if they are still a fraction of their peak of over 40 bcm in the mid-2000s, when Moscow used them to free up lucrative exports to Europe.
There were no indications from the official releases on the meeting that further increases were on the agenda, however, with Russia’s energy giant only vaguely referring to talks “on the course and prospects of cooperation in the gas sector.”
But Miller’s visit increased speculation that Russia is looking to ensure Turkmenistan is an asset rather than an obstacle as Gazprom seeks to reassert its clout in international gas markets after Miller conceded that 2022 was “a difficult year.”
One Russian Telegram channel cited by RFE/RL’s Turkmen Service as being close to the Kremlin said Miller’s headline message to Turkmenistan was that Russia would block any attempt to build a Trans-Caspian Pipeline (TCP) connecting Turkmenistan to Azerbaijan, a development that would free up Azerbaijani gas for exports to Europe.
“In return, [Turkmenistan] was offered participation in gas supplies directly to Turkey through Iran,” the channel, whose name translates as A Look At The East, said. By cooperating with the scheme, “Turkmenistan will become a full member of the gas analogue of OPEC, which is being created by Russia and Iran and to which Qatar intends to join,” it continued.
Gazprom did not respond to a request from RFE/RL for comment.
Piping large quantities of gas across the Caspian Sea has been a stated ambition of Turkmenistan for at least 25 years, although it was never without hitches, even when there was clear investor interest.
A political agreement on the status of the Caspian Sea involving all five littoral states and a bilateral deal between Turkmenistan and Azerbaijan settling contradictory claims in the Caspian Sea were only reached in the last few years.
Even then, Iran and Russia were never keen on the idea and have insisted on the right to block the project on environmental grounds.
Moreover, while a functioning TCP might have been useful to Europe this winter, trends in the European energy market do not favor it, argued Laurent Ruseckas, executive director for the Finance & Capital Markets team at S&P Global Commodity Insights.
Among these are the expansion of European infrastructure related to liquefied natural gas (LNG), which the EU has been importing much more of amid its abandonment of Russian gas, and the EU’s long-term commitment to transitioning to renewable energy, Ruseckas argued.
“There’s real reluctance to commit to or finance big pipeline projects. In the medium-term, Europe will not need the gas. And then there is the question of who is going to want to build and pay for pipelines to serve a market that will be net zero by 2050,” he added.
Heading South With Russian Help?
In December, Serdar Berdymukhammedov met with Azerbaijani President Ilham Aliyev and Turkish President Recep Tayyip Erdogan in the western Turkmen city of Awaza, with Erdogan offering Ankara’s backing for a pipeline connecting the two countries.
But Turkmenistan has told Western diplomats that it is not interested in downsized alternatives to the pipeline that would carry considerably less gas but might be less costly and quicker to build, said Bohr.
“[Turkmenistan] prefers Europe to come along with money and a long-term contract for 30 bcm. This is something that is not going to happen,” she said, noting that Ankara is “growing weary” of Ashgabat’s position on the topic.
Absent an outlet to ramp up exports to the West and looking to balance its sales north to Russia and east to China, Turkmenistan is heading a consortium for a pipeline that would send gas to India via Pakistan and Afghanistan called TAPI, a multibillion-dollar blueprint that has no known investor.
Russia has also expressed an interest in this project, though it has given no firm commitment.
Zamir Kabulov, the Russian envoy to Kabul, said in January that security concerns previously expressed over the project had “lost some of their severity” — a likely reference to the Taliban’s assertion of full territorial control of Afghanistan.
Any involvement in the project on Moscow’s side would depend on the “commercial approach,” Kabulov said.
Ruseckas of S&P Global Commodity Insights told RFE/RL that his estimation of the project’s chances of coming to fruition had “gone from zero to a very low number,” but not for the reasons mentioned by Kabulov.
“I think for India and Pakistan, last year was a shock in terms of how expensive LNG spot prices became,” he said. “They would have loved to have had TAPI in place when LNG prices started to skyrocket.”
But fundamental problems with the project, including transiting Afghanistan and reservations about the technical capacities of Turkmenistan’s state gas company Turkmengaz, have not changed, Ruseckas said.
As for investments from Moscow, “Russia isn’t exactly a country that has billions and billions of dollars to spend on a pipeline right now,” he noted.
But the one enticement that Russia has reportedly offered Turkmenistan — exports to third countries via Iran and its existing gas infrastructure — would not significantly change Ashgabat’s regional energy profile.
John Roberts, an energy security specialist from the British-based research organization Methinks, told RFE/RL’s Turkmen Service that the ceiling of what Turkmenistan could send to Turkey this way would be 5 bcm per year.
Even then, it is not clear whether Turkey would approve of the idea, with Ankara likely to balance opposition to the project from the European Union, Roberts said of the transit offer that Iranian energy officials have publicly endorsed.
But Russia does have leverage over Ashgabat, in that the last time it slashed gas imports from the country — albeit during a nadir in global energy prices — it caused Turkmenistan serious economic pain.
In a rare essay published by Turkmengaz in February 2015, right after Turkmenistan was forced into a sudden devaluation of its currency on the back of falling gas revenues, the company singled Russia out as an “unreliable partner.”
The text of that eyebrow-raising missive is no longer online.
But Bohr told RFE/RL that Turkmenistan would be wise not to put too much faith in Russia’s vision.
“Russia is attempting a major reconfiguration of the gas market, and its isolation from the West has made it more dependent on Iran — and this has repercussions for Turkmenistan,” she said.
“Moscow is looking to gain access in the future through Kazakhstan and Turkmenistan to Iran, and from there to Pakistan and India. However, existing routes to Pakistan provide only small volumes, and there are huge infrastructural constraints and logistical and technical problems associated with these still very hazy ideas.”