SCENE SETTER FOR PDAS MANN'S AUGUST 13-15 VISIT TO

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 000821 SIPDIS SIPDIS SCA FOR PDAS MANN E.O. 12958: DECL: 08/03/2016 TAGS: ENRG OVIP PGOV PHUM PREL TX SUBJECT: SCENE SETTER FOR PDAS MANN'S AUGUST 13-15 VISIT TO TURKMENISTAN REF: A. ASHGABAT 804 ¶B. ASHGABAT 715 ¶C. ASHGABAT 702 ¶D. ASHGABAT 699 ¶E. ASHGABAT 698 Classified By: Charge d'Affaires Jennifer L. Brush, for reasons 1.4 (b) and (d). Summary -------------- ¶1. (U) PDAS Mann, welcome back to Ashgabat, we look forward to your return. Your visit will provide us with an opportunity to meet President Niyazov to discuss oil and gas issues and review progress on the key priorities of our bilateral relationship: -- Promotion of democratic reform and human rights, -- Promotion of economic reform and a market economy, and -- Promotion of security cooperation. End Summary. Since You've Been Gone.... -------------- ¶2. (SBU) Since the international community began to focus more on Turkmenistan's gas reserves following Russia's "New Year's" gas cut-off to Europe, President Niyazov has gone on a promises promises spree, hawking Turkmenistan's gas reserves to all comers ultimately, embassy believes, in hopes of driving up the price he receives from the Russians. The most recent development in this regard was the July 24-25 visit of President Ahmadinejad of Iran (ref A); although the two presidents discussed Caspian boundaries and agreed the issue should be solved by the Caspian states themselves, they did not sign any agreements. They did, however, agree to set up a joint commission to work on issues related to gas prices and supplies. ¶3. (SBU) In spite of Niyazov's flurry of activity, the reality on the group remains essentially unchanged. -- Russia: In December 2005, Turkmenistan signed a contract with Gazprom to supply 30 bcm in 2006 at $65 per thousand cubic meters (tcm). In June, the president told Gazprom that he would increase the price to $100 per tcm, an increase that Gazprom rejected. Turkmenistan declared it will cease all shipments as soon as it meets its 30 bcm commitment (probably in September). Although Russia requested that the gas pipeline be turned off for eight days, effective July 25, for repairs (a move which, in the past, has signaled the start of serious hardball maneuvering),our contacts here agree that this shutdown was likely indeed for the reason stated. -- Ukraine: There are three sides to the Ukraine gas supply story -- Ukrainian, Russian and Turkmenistani. The truth is somewhere murky in between. But as a result of a number of disputes, there has been no gas supplied directly to Ukraine since January. Essentially Gazprom outbid Naftahas (the Ukrainian gas company) for the capacity of the Central Asia Center (CAC) pipeline and informed the Government of Turkmenistan that it, therefore, was unable to issue Naftahas a gas transit license. Ukrainian Fuel and Energy Minister Ivan Plachkov visited Ashgabat June 29-30, at which time he confirmed Ukraine's commitment to pay for gas supplied from 2003 to 2005 in cash and barter amounting to $64 million. The Turkmen government has proposed to Ukraine to supply 10-11 bcm of gas in the fourth quarter at 100 dollars per tcm and to consider supplies in 2007 if Ukraine obtains a transit license with Gazprom. At the end of the day Gazprom has the upper hand in any Ukraine/Turkmenistan gas negotiation and Ukraine will need to make a deal acceptable to Gazprom. -- China: Turkmenistan and China have a framework agreement under which China will purchase 30 bcm of natural gas annually on the Turkmenistan border for 30 years after the opening of an operating pipeline in 2009. China will purchase the gas at the border and will be responsible for building the pipeline. Chinese Embassy representatives consistently has told us that they consider the agreement nothing more than a "framework" and that any future deal will involve verifiable information on the volume of gas reserves ASHGABAT 00000821 002 OF 003 on the east bank of the Amu-Darya River. According to official media here, the parties already have initiated joint exploration of the region. -- Iran: In February 2006, the two sides agreed to increase the price from $42 to $65 per tcm. Turkmenistan currently exports approximately 8 bcm per year. The two countries have agreed to the sale and purchase of up to 14 bcm in 2007. While the two sides discussed gas sales during President Ahmadinejad's visit, they apparently did not reach agreement on a new price, and instead established a joint commission to address the issue. -- TAP: The last meeting of the Steering Committee took place in Ashgabat in February. Gas availability (certification of the Dovletabad field) and Afghanistan security issues remain unresolved. Turkmenistan is pushing for a commitment to specific purchase volumes from Pakistan and India. The TAP is designed to supply 30 bcm per year. -- TCP: The project is inactive, though the Government of Turkey remains keenly interested, according to the Turkish Ambassador in Ashgabat. Human Rights Issues -------------- ¶4. (C) The embassy continues to actively advocate improved observance of human rights and sometimes enjoys limited success, though the overall picture remains abysmal. -- Jackson)Vanik (ref B): The Government of Turkmenistan displays gross indifference to freedom of movement in general and rarely responds to cases raised by the embassy. The government preposterously denied the existence of a known &black list8 via a July 3 diplomatic note (even though Charge has discussed the list on several occasions with Foreign Minister Meredov),and remains intransigent on resolving outstanding cases of extended family members of those convicted of involvement in the 2002 assassination attempt on President Niyazov. The embassy has advocated in several individual cases, but the singular embassy success story was when the ambassador raised a case directly with Niyazov. Embassy has warned Turkmenistan that the J-V waiver will not be renewed at the next review scheduled for the end of 2006 unless significant progress has been made in both resolving individual cases and making list criteria transparent. -- Registration of independent NGOs: No new NGOs were registered in 2005 and thus far in 2006. The embassy regularly advocates for a more transparent registration process and to register the U.S. government exchange programs alumni group. -- ICRC access: During their recent July 31 visit (septel), ICRC representatives advised us not to raise this directly with the Government of Turkmenistan, now opting for a more "independent" approach. -- Continued Demolitions in the Name of Beautification: During the weekend of July 29-30, demolition of over 1000 homes in a large residential neighborhood near the DCM's residence began. Residents were given 48-hour eviction notices, and those who had built permanent homes in the area were unable to get any compensation for their losses. Local sources say the demolition order came during the state visit of Iranian President Ahmadinejad when President Niyazov passed the neighborhood en route to the July 25 opening of the new Turkmenistan-Iranian border crossing checkpoint at Gowdan-Bajgiran. -- Elections: Village council elections were held on July ¶23. Though the campaigns and elections were mostly staged events resulting in the election of thousands of local officials to essentially powerless local bodies, emphasis on multiple candidates and secret voting was a positive step. District elections scheduled for this December will be a more important event wherein we hope to see multi-party candidates and increased voter participation. Ultimately we look forward to free and open presidential elections in 2009. Improving Security and Health Engagement -------------- ¶5. (SBU) The bilateral relationship with the government in ASHGABAT 00000821 003 OF 003 the areas of security cooperation, non-proliferation and health has progressively improved. The government increasingly participates in domestic and international training opportunities. -- Security cooperation: The Nevada National Guard is using $5 million of CENTCOM,s FY05 Counternarcotics Supplemental funds to build two border crossing checkpoint stations. The Altyn Asyr station on the Iranian border is scheduled for completion at the end of September. The Imam Nazar project on the Afghanistan border will be completed in early 2007. (Embassy will open the former quietly and plan a more publicized event for the latter.) Additionally, the International Narcotics and Law Enforcement (INL) program continues a good relationship with the Ministry of the Interior,s national forensic laboratory and embassy staff have attended three drug burning events. DOD,s military-to-military programs have seen increased participation and overall engagement. -- Non-proliferation: Turkmenistan has a surprisingly good non-proliferation record, thanks, in part, to its policy of neutrality. For the past two years, the government has provided embassy's Export Control and Related Border Security (EXBS) advisor access to border areas. Turkmenistan has shown an increased interest in EXBS activities, and embassy has experienced little difficulty obtaining government participation for in-country and international training programs and conferences. Turkmenistan also has signed the Proliferation Security Initiative, as well as the IAEA Safeguards Agreement and Additional Protocol. -- Health: For the first time, the government submitted an application to the Global Fund to fight tuberculosis, HIV/AIDS and malaria. The first USAID HIV/AIDS assistance project was approved by the president, which we hope ultimately will lead to the first-ever drug demand reduction program in Turkmenistan. Your Meeting with Niyazov, "How's the Family?" -------------- - ¶6. (C) In addition to discussing the current state of play of energy issues and the Ahmadinejad visit with the president, embassy suggests raising the following: -- Jackson-Vanik, -- Human rights and civil society issues, and -- Election plans, through presidential elections in 2009. ¶7. (C) In an interesting twist, there are credible reports that Niyazov's son, Myrat, may now be living in Ashgabat and may be taking on some governmental responsibilities in the future. During the past year embassy unsuccessfully has been attempting to arrange a meeting with Myrat in Vienna. Your meeting may be an opportunity to observe Turkmen traditions and ask about the family. ¶8. (U) We look forward to your visit. BRUSH