President of Turkmenistan Gurbanguly Berdymukhamedov has arrived in Russia today, on November 1. The visit was quite unexpected, as the Turkmen leader is not used to travel much, especially to the post-Soviet countries. Considering the uneasy relations of Moscow and Ashgabad over gas issues, one can suppose that something is due to change in their relations or they are on the verge of ending. Andrey Grozin, Head of the Department for Central Asia and Kazakhstan at the CIS Institute, answers EADaily’s questions about the Russian-Turkmen relations.
Was the Turkmen president’s visit really unexpected?
The visit was prepared a day before. It was a kind of “impromptu” by Gurbanguly Berdymukhamedov. The reason is the financial crisis everyone is speaking about: country-wide job cuts, food supply problems, and shortage of national currency, problems with ATMs, salaries, and many other problems the opposition writes about and the neighbors point at. At the government’s latest meeting dedicated to the preparations for Asiada, Berdymukhamedov reprimanded and criticized the executives, which means that the treasury is empty.
Do you mean that he has arrived for money?
Two things have brought him to Bocharov Stream, Sochi: security issues and financial problems. The security situation is complicated, though not as tense as in 2014 or past summer.
Well, Foreign Minister of Russia Sergey Lavrov suggested assistance, but Berdymukhamedov refused.
We learned about this from comments, but we do not know what they were talking about behind the close doors and how all that happened. Then he thought he can get protection from somewhere else.
He was negotiating with United States…
This is the East, after all, this is trade – if you want a goat, ask a camel. Everything is clear. Perhaps the pause Gazprom took in the relations with Turkmenistan and officially announced about it makes Ashgabad certainly nervous*. If after talks, there are any signs that the presidents take their relations to a new level, this will have an impact on the gas field too. By the way, Alexey Miller has lately met with the Russian president and now with Berdymukhamedov. I do not say that these meetings were interconnected, but they could be such. Logically, what else could make Berdymukhamedov travel to Russia when the security situation in Turkmenistan is more or less tolerable? Judging by all, China still buys gas in repayment for the loan. This is at least $8 billion, if not more. Another matter what the financial reports of the Turkmen side say and how reliable they are. The budget is not being replenished with net cash. No one knows how long this will continue – it is a commercial secret. The situation is complicate and needs interference. After all, Berdymukhamedov not often makes such visits at the bilateral level. Turkmen leader’s last visit to Russia was in 2011. Therefore, these days Berdymukhamedov will be not just discussing gas issues but trying to settle them. Ashgabad has a large stake in this visit.
Does Russia need the Turkmen gas now when it has its own gas enough and to spare?
Yes, it needs, because it will give Russia more opportunities to play on the region’s market of hydrocarbons. We can see that Turkmenistan has turned into a kind of “gas storage” for China. However, this does not mean that we should leave that field and forget about it forever.
Where will we be supplying the Turkmen gas to?
There are long-term interests, there are interests of service companies, interests of various mediators, and there is the region’s gas market. The Turkmen gas can be interesting to Gazprom that has become Kyrgyzstan’s gas distribution network operator. Taking into account the complicated relations in the regional gas market, a big operator able to control part of the Turkmen gas can play not only in the Central-Asian market, but also in Afghanistan, Pakistan, and other countries in the wider region. This is an opportunity to expand the potential geo-energy game that exists and will always exist. Although Turkmens exaggerate their gas reserves, they have enough reserves. This is the money they need. Berdymukhamedov will offer something to Putin.
What about security? What can he ask from Russia: maybe to deploy troops on the border or supply weapons?
It’s unlikely. The Turkmen mentality will not let Russia deploy troops. I mean not only the neutral state status. Turkmens do not need Russians, Chinese, or U.S. troops on their territory. The situation is not so critical so far to start relying on foreign forces. What they need is expansion of the military-technical cooperation.
But, Turkmenistan is short of money…
Maybe they hope to get something from Russia for free. There are precedents: the Russian-Kyrgyz military-technical cooperation or the Russian-Tajik one.
This is within the CSTO…
Yes, but Russia’s security largely depends on the security of Turkmenistan. It is a thesis. Russia can keep going its former partner in the Socialist camp, in the Soviet Union. He will arrive and ask arms supply on preferential terms, on trust. Later, Russia will probably write off the debts and forget about it, like it did for African states in the Soviet period, like it did for Cuba and is now doing for Kyrgyzstan and Tajikistan. That is the case, I think. There are fully packed arms depots in Turkmenistan, but it experiences problems with spare parts, as these are Soviet models only. Turkmenistan has made no large procurement of serious weapons. Under previous president, Ashgabad bought just single models of weapons. Unlike Kazakhstan and Uzbekistan, Turkmenistan needs a serious army modernization.
* Gazprom, the largest consumer of the Turkmen natural gas after the Chinese CNPC, had been insisting on lower procurement price for several years, motivating it with the sliding prices in the world, but Turkmenistan refused to make concessions. In June 2015, Gazprom filed a lawsuit against Turkmengas at the international arbitration court in Stockholm over the price in the contract. In response, it was accused of failing to pay for the supplied gas and was declared “insolvent.” The Russian giant sought $5 billion. Along with those disputes, the procurement fell from 10billion cubic meters of gas in 2014 to 4billion cubic meters in 2015. In January 2016, Ashgabad said Gazprom denounced the gas procurement contract ahead of term. In September, Alexander Medvedev, Deputy Head of the Board of Executive Directors at Gazprom, said the company’s lawsuit was suspended and the sides would be trying to find a solution through talks. Nevertheless, Gazprom will not be purchasing the Turkmen gas at least until 2018.