Gas contract with the Russian Federation will reduce the relevance of the Trans-Caspian gas pipeline for Turkmenistan

The news that Turkmenistan and Russia are discussing a new five-year contract for the supply of Turkmen gas to the Russian Federation has aroused great interest in both Turkmen and foreign media. It is understandable. The agreement between the largest gas powers of Eurasia, which are Russia and Turkmenistan, in fact, determines the energy map of the region, the direction of energy flows in the Eurasian space.

In any case, it is highly likely that a stable, medium-term, mutually beneficial gas contract between Moscow and Ashgabat will reduce for the latter the relevance of building the Trans-Caspian gas pipeline and connecting to the Southern Gas Corridor.

Here we are not talking about the fact that Turkmenistan removes the European direction from the agenda and stops working in the field of organizing the supply of its natural gas to Europe. Simply, if stable, mutually beneficial supplies of Turkmen gas to Russia are organized, the European direction will become a regular project for Ashgabat. This means that it will remain on the agenda of negotiations between Turkmenistan and the EU, but it will no longer be a priority project.

Why? First of all, because, judging by recent events, the project of supplying Turkmen natural gas to the European market has ceased to be a priority for the European Union itself. Before signing the Convention on the legal status of the Caspian Sea, when it was impossible to formally build underwater pipeline systems, Brussels actively promoted this project, organized meetings, negotiations, and made plans on how best to organize Turkmen gas exports to Europe.

But after the signing of the Convention in August last year, when all the formal obstacles seem to have disappeared, there was a lull. One gets the impression that overnight the forbidden fruit, that is, Turkmen gas, has ceased to be “sweet.” All the states involved in this project, and those who previously called for more active involvement in the work, suddenly pretended to be busy with other more important things.

Are they really busy, indeed? The times are now very difficult, Brussels must cope with the problems of migration, Brexit, the collapse of the anti-nuclear deal with Iran, uneasy relations with Washington, Moscow, Ankara, etc.

In order to solve all these issues to the great pleasure of all parties, you need to be at least a fakir. Therefore, I admit that now the Europeans are simply not up to Turkmen gas.

Well, nothing to worry about. While Brussels solves its problems according to their relevance, Ashgabat is also engaged in business. It is now important for us to effectively develop our gas potential.

Therefore, Turkmenistan is negotiating with Russia to conclude a five-year gas contract, and the second stage of these negotiations should begin soon in Ashgabat. And how exactly Turkmen gas will enter the European market – through the Russian gas transmission system or the Southern Gas Corridor – is of no fundamental importance for the supplier, that is, Turkmenistan.

Moreover, Ashgabat is currently shifting the emphasis in developing its gas resources from exporting raw gas to creating a gas chemical industry, deep processing of gas and manufacturing high value-added products. Partnership in this area is offered to Turkmenistan by Russia, as well as by world leaders in this field – Japan and South Korea.

As for the export of Turkmen natural gas through the Southern Gas Corridor – who knows, maybe the conditions will mature for it in the future. Twenty years ago, the export of Turkmen gas to China was considered almost a fantastic project. However, 10 years ago, the inhabitants of the Middle Kingdom started to use Turkmen gas.

In this regard, the European direction is no worse and no better than the Chinese one. So, let us wait and see.


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