Turkmenistan to emphasize diversification of energy resources market and its economy: experts

Turkmenistan to emphasize diversification of energy resources market and its economy: experts

Azerbaijan, Baku, Jan. 7 / Trend , E.Hasanov/

On the background of gas crisis between Russia and Ukraine, as well as global economic recession, Turkmenistan will more emphasize diversification of sale markets of energy resources and is economy, local experts believe.

"Presence of gas Klondikes is not a guarantee of success and this fact dramatizes the latest news. There is always need for alternative routes. It is necessary to rely on interior reserves in order not to be a hostage of the Holland disease (dependence of treasury on deliveries of raw materials). The Turkmen government will emphasize thee milestones, as well," a Turkmen expert told via telephone, keeping anonymity. He said that Turkmenistan has faced with a "mirror situation" around deliveries of energy resources to Tajikistan and some part to Afghanistan due to absence of customers' contract with the transit Uzbek government. Although Russia and Ukraine having a transit contract cannot agree on a price for the Ukrainian market, a transit issue has become a leverage of pressure.

Official Ashgabat sells energy resources only within its borders, yielding to sharp transit debates of raw material importers. The list includes natural gas, whose considerable reserves are confirmed by the British Gaffney, Cline & Associates in the Turkmen territory, which included the country with 5 million people in top five of gas seats of the Earth. The Turkmen authorities believe that era of bilateral relations in energy resource deliveries should yield to global energy security under the United Nation's aegis, which finally should adopt a special Convention on security of international pipelines. The Turkmen government is prepared to call a representative conference on this matter in Ashgabat.

"This is a strong equalizing factor envisaging efficient multilateral partnership in protection of energy infrastructure, creation of favorable foreign political conditions its normal functioning, for constructive cooperation of all participants of the pipeline projects, including producers, transitors, and consumers of energy resources," the Turkmen Foreign Ministry noted in its analytical article.

"By the way, Turkmenistan has lived in a regime, when a gas key has been frozen due to non-payment of Kiev and intractability of the Kremlin in the issue of prices," the Turkmen expert mentioned. At that time the country faced with an issue on self-sufficiency and began to grow wheat and to develop animal husbandry in late 1990s, he said. In recent years, Turkmenistan vigorously took up promoting the processing products output - both oil and gas. Export of liquefied gas is growing - it is purchased by Japan and the European countries. Almost 2 billion dollars was invested in the largest refinery in Turkmenbashi. Funds are invested in gas processing, chemical and textile industries, cotton processing.

Yet all these currency earnings of Turkmenistan are not comparable to those received from the export of the "blue fuel". Ashgabat argues they possess huge reserves of hydrocarbons and that provides confidence in the expediency of simultaneous implementation of several gas projects in various directions. Thus, according to the plans of state concern Turkmengaz, annual export will increase from the current 50 billion cubic meters to 125 billion cubic metres by 2020, and to 140 billion cubic metres by 2030.

Turkmenistan's Foreign Ministry stressed that "the diversification of energy supplies is not just a lucrative and promising national project. Today it is an objective requirement of the rules in the world market, the most important condition for the healthy functioning of the global economy, a kind of barrier to a large extent saving it from the deformations and imbalances".

Turkmenistan is already moving in this direction. In late 2009, a "breakthrough" is expected to take place in the geography of Turkmen gas deliveries - finally there will be the first tangible alternative to the traditional route through Russia. A gas pipeline to Iran has been operating since 1996, but it transports small volume of fuel. China intends to acquire up to 40 billion cubic meters of gas per year during 30 years. The traditional buyer Gazprom OJSC, which has been holding "hot" disputes with Kiev over transit to freezing Europe for many years, has many times stated "it is ready to buy as much gas as produced in Turkmenistan". According to a long-term contract, Russia is interested in increasing exports from Turkmenistan from the current 40-50 billion cubic meters of gas per year to 80 billion cubic meters.

"This is a justifiable step by Moscow," a Turkmen gas transportation company employee told Trend . He believes that despite the fact that Russia controls more than a quarter of world gas reserves (more than any other country), the lion's share of its resources is concentrated in Western Siberia. And harsh natural conditions and their remoteness from world markets make them expensive to develop.

Not only India but Europe, whose 40 percent of demand in gas is provided by Russia, strive for Caspian region as an alternative, in particular, for Turkmenistan which presence adds "expediency" in any project. The unexampled gathering of representatives of companies and the international organizations from western countries at a petroleum conference in Ashgabat in November 2008 is clear evidence.

Representative of the European Committee Derek Taylor expressed a single meaning those days in the capital of Turkmenistan. "Since 2006 gas crisis in Ukraine, diversification of gas supplies has been one of the most important trends in political agenda."

The EU countries can offer their partners in Turkmenistan safe cooperation - growing consumer market, profitable prices and world class companies which will help to develop gas resources, he said. From his point of view, all this should pull Turkmenistan to join advertised Nabucco project targeting to "bring" Caspian resources to All-European "house". Recently, activity in this direction was moved up. In autumn Turkmenistan's President Gurbangulu Berdimuhammedov paid visit to Austria and Germany. In their turn, presidents of Turkey, Azerbaijan, Bulgaria and Hungary - all these countries-members of the transnational project visited Ashgabat.

At the same time, Ashgabat has an experience of last years when practically all pro-western projects failed.

Since beginning U.S military operations against Taliban movement, the U.S Company Unocal had to leave initial ambitious oil gas pipeline Turkmenistan-Afghanistan-Pakistan early 1990s. Tran Caspian project to Turkey and Europe with participation of consortium headed by U.S PSG and initially working under agreement between Turkmenistan and Turkey on purchase-sale in the amount of 30bln cu. M of Turkmenistan's gas was failed. That time Ashgabat didn't agree to give half of pipe for Azerbaijan's gas suddenly found out at Shahdeniz field. As Turkmenistan's authorities consider, the United Nations can and ought to protect international projects from "political, economic, ecological and man-caused risks".

By the way, the UN supported special resolution initiated by Ashgabat "reliable and stabile transit of energy carriers and its role to ensure stabile development and international cooperation".

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