Turkmenistan has the world’s sixth-largest natural gas reserves, but its geographic and political isolation, as well as the will of the global powers, limit its ability to export this crucial resource. The former Soviet republic is one of the most closed and isolated countries in the world. Even though the Central Asian state is officially recognized as a permanently neutral nation, it slowly started entering China’s geopolitical orbit and it heavily depends on gas sale, not only to the People’s Republic but to Russia as well.
Turkmenistan’s geoeconomic importance stems from its energy resources. The country also has a major geopolitical significance since it shares borders with Afghanistan, Iran, Kazakhstan and Uzbekistan. It is also linked with Azerbaijan, Iran, and the Russian Federation via the Caspian Sea. Despite its vast energy resources, the Central Asian nation has thus far failed to become a major energy player.
Turkmenistan holds the title of the most authoritarian of all former Soviet states. It is also the most isolated of all former Soviet republics. After the breakup of the Soviet Union, Turkmenistan was transformed from one-party Communist rule to one-party rule of the newly renamed Democratic Party of Turkmenistan, the successor to the Communists. Since the very same people who were in power during the USSR kept running the show after the country declared independence, their modus operandi remained unchanged. Instead of communism the new ideological cover became Turkmen nationalism, and the country’s leadership drastically reduced Russian influence in the Central Asian state. Turkmenistan’s economy remains centrally planned and tightly controlled by the government, as it was the case during the Soviet era. Turkmenistan economy’s key sector is energy, mainly gas and oil, which reportedly account for 31 percent of GDP.
According to author Paul Stronski, the regime tried to transform a clan-and tribe-based society into a nation centered on a single political leader through the creation of the President Saparmurat Niyazov’s personality cult. He points out that the state propaganda machine built up an image of Niyazov as a godlike figure leading a revitalized Turkmen nation. At the same time, the population received social benefits: free water, gas, and electricity as well as subsidized bread, gasoline, and public transportation. After Niyazov suddenly died in 2006, new president Gurbanguly Berdimuhamedov replaced Niyazov’s cult with his own, based on the same blueprint.
Since the country’s independence from the Soviet Union, Turkmenistan has maintained in a neutral position in regards to most international matters. On December 12 1995, Turkmenistan was recognized as a permanently neutral State by the resolution of the United Nations General Assembly with the unanimous support of 185 member states. This position has helped Ashgabat avoid membership in Russia-backed integrations such as the Eurasian Economic Union and the Collective Security Treaty Organization. It is worth noting that Turkmenistan is the only Central Asian state that is not a member of the Shanghai Cooperation Organization. However, over the past decade, Ashgabat has grown increasingly dependent on Beijing. As Stronski emphasizes, Turkmenistan’s reliance on China is based not on gas sales alone but also on Chinese financing for the energy infrastructure that extracts and exports gas via pipeline from Turkmenistan to China.
MAJOR FOREIGN ACTORS
China’s economic influence in Turkmenistan far exceeds that of all other countries. For instance, Turkmen exports to China totaled $8.65 billion in 2014, while exports to Turkey – the country’s second most important market – amounted to a mere $567 million. According to Stronski, until the Chinese-financed Central Asia–China pipeline opened in December 2009, Turkmenistan’s gas exports were highly vulnerable to Russian pressure, with Russian energy giant Gazprom controlling the only pipeline built in the Soviet era to transport natural gas from Central Asia to markets in the West. As senior researcher Benno Zogg explains, Chinese loans funded the gas pipeline between the two countries and China now purchases Turkmen gas at a discount and thus holds substantial leverage over the government. Presently, China is the only country that buys Turkmenistan’s gas in substantial quantities. Turkmenistan increasingly depends on China as a lender and source of investment. However, Russia still remains an important energy partner for Turkmenistan signified by the recent five-year deal with the Russian energy giant Gazprom.
According the agreement between Moscow and Ashgabat singed in 2019, Turkmenistan will export 5.5 billion cubic meters of gas per year to Russia by 2024. That way Russia is expected to gradually restore leading share in Turkmenistan’s gas export. State-owned Gazprom used to do business with Turkmenistan under a deal signed in 2009, but the company left the country after officials in Ashgabat refused to revise the terms of the contract and sell its resources to Russia at a renegotiated rate. According to Stratfrod, Gazprom was previously buying Turkmenistani gas at “embarrassingly low” price and reselling it at its own rates in Europe.
Besides Russia and China, many other global and regional actors are interested in Turkmenistan’s gas. Even though Iran has significant gas reserves, it still imports natural gas from Turkmenistan in order to meet demands of its northern provinces that are bordering the Central Asian state. New Delhi and Islamabad are also trying to find a way to get linked to pipeline that would supply Turkmen gas to India and Pakistan. The Turkmenistan–Afghanistan–Pakistan–India Pipeline, also known as Trans-Afghanistan Pipeline, which has been under construction since 2015, is a crucial for the Turkmen economy. This new market could further diversify Turkmenistan’s natural gas partners and provide energy to the fast-growing economies of South East Asia. The Taliban have vowed to cooperate and not disrupt the project in areas they control, and it remains to be seen if the pipeline will be completed by the end of 2020.
The United States and the European Union, on the other hand, are strongly pushing for Trans-Caspian Gas Pipeline. This project is purposed to transport natural gas from Turkmenistan and Kazakhstan to European Union member countries, circumventing Russia and Iran. This planned gas corridor would connect the vast gas reserves of Turkmenistan through Azerbaijan to Turkey and then into the EU. Ankara would certainly benefit from this pipeline as it would become a natural export hub for the region. However, Iran and Russia oppose the long-proposed Trans-Caspian Gas Pipeline project as they fear it could potentially create greater competition in the European market. According to the Russian Natural Resources Ministry, any gas or oil pipelines across the floor of the Caspian Sea would be environmentally unacceptable. Iranian officials repeated on several occasions that any action taken without the consent of all the littoral states would be illegal. Demarcation disputes among the Caspian Sea have hampered plans to construct a gas pipeline to Europe along a different route. At this point, it is highly uncertain if this project will be implemented any time soon.
FUTURE OF TURKMENISTAN’S GAS
Given the Turkmenistan’s inability to secure its borders, radical groups from the neighbouring countries, particularly Afghanistan, can easily destabilise the former Soviet republic. That could be just the beginning of the struggle for Turkmenistan’s energy. Since the era of fossil fuels is coming to an end, in the foreseeable future major global and regional powers will either make a deal over the redistribution of Turkmenistan’s gas, or they will fight a proxy war for this natural resource. There is no doubt that some of them will try to justify such an action as a desire to bring democracy and human rights to the Central Asian country.