KYRGYZ ENERGY MINISTER DISCUSSES PURCHASING

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001257

SIPDIS

STATE FOR SCA/CEN, EEB

E.O. 12958: DECL: 09/23/2018
TAGS: PREL EIND ENRG EPET ETRD KG UZ TI TX
SUBJECT: KYRGYZ ENERGY MINISTER DISCUSSES PURCHASING
ELECTRICITY, GAS FROM TURKMENISTAN

Classified By: Charge d'Affaires a.i. Sylvia Reed Curran for reasons 1.
4 (B) and (D).


1. (C) SUMMARY: President Berdimuhamedov and Kyrgyz
Minister of Industry, Energy, and Fuel Resources Saparbek
Balkibekov discussed in meetings in Ashgabat on September 17
Kyrgyzstan's need to purchase electricity for the upcoming
winter and interest in purchasing petrochemical products in
the future. Turkmenistan agreed to export 1.2 billion
kilowatts of electiricty to Kyrgyzstan. Turkmenistan is also
interested in purchasing industrial glass and cement from
Kyrgyzstan. The parties did not come to any agreement on gas
sales, because, according to the Kyrgyz Embassy, Kyrgyzstan
first must conclude transit agreements with Uzbekistan and
Tajikistan, which may prove to be difficult. END SUMMARY.


2. (U) President Gurbanguly Berdimuhamedov met with Kyrgyz
Minister of Industry, Energy, and Fuel Resources Saparbek
Balkibekov in Ashgabat on September 17. The official
Russian-language government newspaper "Neytralniy
Turkmenistan" reported on September 18 that the two officials
discussed cooperation in the energy sector, and that
Berdimuhamedov aid Turkmenistan's energy policy is based on
diversification. The article also said that Kyrgyzstan was
especially interested in importing natural and liquefied gas,
petroleum products, and electric power from Turkmenistan.

MAIN FOCUS OF THE VISIT: ELECTRICITY


3. (C) Kyrgyz Embassy Counselor Melis Sydykov (strictly
protect) said in a meeting on September 22 with econoff that,
in addition to President Berdimuhamedov, Minister Balkibekov
met with Deputy Chairman for Oil and Gas Tachberdi Tagyev,
Minister of Trade and Foreign Economic Relations Nokerguly
Ataguliyev, and Acting Minister of Oil and Gas Industry and
Mineral Resources Bayramgeldi Nedirov. Sydykov said that
Kyrgyzstan is concerned about its ability to produce enough
hydroelectric power for the upcoming winter, as this is the
seventh year in a seven-year cycle during which its dam
waters reach low levels. While the Toktogul dam usually
holds 15 billion cubic meters of water -- and as much as 18
billion cubic meters -- the dam currently holds only 12
billion cubic meters. Turkmenistan agreed to export 1.2
billion kilowatts to Kyrgyzstan, and Sydykov said that this
is acceptable to Kyrgyzstan. Sydykov said that Iran and
Turkey buy about a billion kilowatts every year from
Turkmenistan, and Afghanistan buys a small amount. Sydykov
added that Kyrgyzstan's small power plants do not produce
much electricity, reinforcing Kyrgyzstan's dependence on
hydroelectric power.

PETROCHEMICALS ALSO ON THE TABLE FOR DISCUSSION


4. (C) Sydykov said that Kyrgyzstan wants to buy 1 billion
cubic meters of gas from Turkmenistan per year. Currently
Kyrgyzstan purchases 850 million cubic meters of gas per year
from Uzbekistan. Turkmenistan agreed in principle to sell
gas to Kyrgyzstan. However, Sydykov said, the Turkmen
repeated the usual offer to sell gas at Turkmenistan's
borders. However, as Sydykov pointed out, Kyrgyzstan must
now negotiate with Uzbekistan and Tajikistan for transit
agreements through these countries. According to Sydykov,
Kyrgyz and Turkmen officials did not discuss price because
Kyrgyzstan must first determine how to transport the product.
Since it might be possible to purchase liquefied natural
gas, transportation options include train and motor vehicle.

INDUSTRIAL INTERESTS


5. (C) Sydykov added that Turkmenistan is interested in
importing high-quality glass made in a German-constructed
factory, as well as cement for industrial construction
purposes. According to Sydykov, Turkmenistan does not have
any comparable glass factories. The Kyrgyz-made cement, used

ASHGABAT 00001257 002 OF 002


for pouring foundations of large buildings, is also desirable.

KYRGYZSTAN SATISFIED WITH MEETINGS


6. (C) Sydykov was pleased with the outcome of the meetings,
stating that Kyrgyzstan is looking at purchasing
petrochemical products from Turkmenistan as an option for the
future, adding that price will be a deciding factor.
Kyrgyzstan is resigned to paying "European prices" because it
doesn't have a choice and because fuel is a necessity.


7. (SBU) COMMENT: Turkmenistan's agreement to export 1.2
billion kilowatts of electricity to Kyrgyzstan for the coming
winter is positive. Turkmenistan is committed to friendly,
positive relations, including commercial relations, with the
other Central Asian states. END COMMENT.
CURRAN