Identifier
Created
Classification
Origin
08ASHGABAT38
2008-01-08 17:46:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN: UPDATE ON OIL AND GASS DEVELOPMENTS SINCE
how-toVZCZCXRO7127 PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ RUEHPW RUEHROV RUEHVK RUEHYG DE RUEHAH #0038 0081746 ZNR UUUUU ZZH P 081746Z JAN 08 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC PRIORITY 0027 INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY RUCNCIS/CIS COLLECTIVE PRIORITY RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY RUEHAK/AMEMBASSY ANKARA PRIORITY 3217 RUEHBJ/AMEMBASSY BEIJING PRIORITY 1032 RUEHKO/AMEMBASSY TOKYO PRIORITY 0906 RUEHIT/AMCONSUL ISTANBUL PRIORITY 1480 RUEKJCS/JOINT STAFF WASHDC PRIORITY RHMFIUU/CDR USCENTCOM MACDILL AFB FL PRIORITY RUEKJCS/SECDEF WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RHEFDIA/DIA WASHDC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
UNCLAS ASHGABAT 000038
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EEB
STATE PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF
E.O. 12958: N/A
TAGS: PGOV PREL EPET TX
SUBJECT: TURKMENISTAN: UPDATE ON OIL AND GASS DEVELOPMENTS SINCE
TIOGE-2007 IN OCTOBER
UNCLAS ASHGABAT 000038
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EEB
STATE PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF
E.O. 12958: N/A
TAGS: PGOV PREL EPET TX
SUBJECT: TURKMENISTAN: UPDATE ON OIL AND GASS DEVELOPMENTS SINCE
TIOGE-2007 IN OCTOBER
1. (U) Sensitive but unclassified. Not for public Internet.
CASPIAN LITTORAL PIPELINE: FINANCIAL DETAILS STILL UNCLEAR
2. (SBU) On December 20, Turkmenistan, Kazakhstan and Russia signed
an agreement to build a natural gas pipeline along the Caspian coast
line. However, none of the three parties has subsequently shed any
light on the cost structure of the pipeline, and it is quite
possible that this issue remains undecided, even though press
reports suggested each would pay for its own section, leaving Russia
the clear winner with by far the shortest section. Other interested
parties, most notably including Petronas, which operates a ga-rich
block in Turkmenistan's sector of the Caspian Sea, apparently are
not being kept in the loop in the negotiations. A few Russian press
reports mentioned a possible arrangement to create an operator
company in which Russia and Kazakhstan will have equal stakes, while
Turkmenistan will hold a minority share. Turkmenistani papers only
covered information on the technical design of the line. The total
capacity of the pipeline is to be 20 bcm of natural gas a year, with
both Turkmenistan and Kazakhstan contributing to the total.
According to the agreement, Turkmenistan will lay a new pipe and
build new and rehabilitate existing compressor stations of the 290
kilometer section of the old CAC-III (Central Asia-Center III)
system on its territory. The CAC-III merges with the CAC-IV in the
Kazakhstani city of Beyneu and then connects to the Russia pipeline
network in Alexandrov Gai.
GAS SUPPLIES TO IRAN HALTED INDEFINITELY
3. (SBU) Turkmenistan stopped supplying gas to Iran in the first
days of 2008. The news came shortly after the Iranian oil Ministry
delegation visited Ashgabat on December 26. Although Turkmenistan
officially stated that the reason for stopping the supply is to
conduct an overhaul of the pipeline system, Iranian press reports
suggest that Turkmenistan is interested in increasing the price of
gas to Iran by 200%. The official price for Turkmenistan's southern
neighbor was last reported two years ago as $65 per thousand cubic
meters.
NEW AUDIT OF PETROLEUM RESERVES
4. (SBU) In late December, President Berdimuhamedov ordered yet
another audit of Turkmenistan's oil and gas reserves (the last one
was conducted about four years ago, in connection with a possible
Trans-Afghanistan pipeline). The President commented that the audit
will help adjust the 2030 Petroleum Sector Development Plan, a plan
many experts consider too ambitious. It is still not clear,
however, whether the results will be made public. A recent public
announcement that Turkmenistan did not produce the planned 20
million tons of oil in 2007 could also be prompting President
Berdimuhamedov to reconsider the 2030 Plan production targets.
BURREN SOLD, WHILE LUKOIL REMAINS WITHOUT A PSA
5. (SBU) The UK-registered hydrocarbon firm, Burren Energy,
unexpectedly announced that it had been acquired by an Italian firm,
Eni, for $3.6 billion. We hear the Government of Turkmenistan was
not pleased by Burren's failure to inform it prior to the public
announcement. Just a few weeks later, an apparently premature press
announcement that LukOil had signed a memorandum of understanding
for some Caspian blocks reportedly elicited such a strongly negative
reaction in Ashgabat that LukOil was forced to issue a retraction
the next day.
HOAGLAND
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EEB
STATE PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF
E.O. 12958: N/A
TAGS: PGOV PREL EPET TX
SUBJECT: TURKMENISTAN: UPDATE ON OIL AND GASS DEVELOPMENTS SINCE
TIOGE-2007 IN OCTOBER
1. (U) Sensitive but unclassified. Not for public Internet.
CASPIAN LITTORAL PIPELINE: FINANCIAL DETAILS STILL UNCLEAR
2. (SBU) On December 20, Turkmenistan, Kazakhstan and Russia signed
an agreement to build a natural gas pipeline along the Caspian coast
line. However, none of the three parties has subsequently shed any
light on the cost structure of the pipeline, and it is quite
possible that this issue remains undecided, even though press
reports suggested each would pay for its own section, leaving Russia
the clear winner with by far the shortest section. Other interested
parties, most notably including Petronas, which operates a ga-rich
block in Turkmenistan's sector of the Caspian Sea, apparently are
not being kept in the loop in the negotiations. A few Russian press
reports mentioned a possible arrangement to create an operator
company in which Russia and Kazakhstan will have equal stakes, while
Turkmenistan will hold a minority share. Turkmenistani papers only
covered information on the technical design of the line. The total
capacity of the pipeline is to be 20 bcm of natural gas a year, with
both Turkmenistan and Kazakhstan contributing to the total.
According to the agreement, Turkmenistan will lay a new pipe and
build new and rehabilitate existing compressor stations of the 290
kilometer section of the old CAC-III (Central Asia-Center III)
system on its territory. The CAC-III merges with the CAC-IV in the
Kazakhstani city of Beyneu and then connects to the Russia pipeline
network in Alexandrov Gai.
GAS SUPPLIES TO IRAN HALTED INDEFINITELY
3. (SBU) Turkmenistan stopped supplying gas to Iran in the first
days of 2008. The news came shortly after the Iranian oil Ministry
delegation visited Ashgabat on December 26. Although Turkmenistan
officially stated that the reason for stopping the supply is to
conduct an overhaul of the pipeline system, Iranian press reports
suggest that Turkmenistan is interested in increasing the price of
gas to Iran by 200%. The official price for Turkmenistan's southern
neighbor was last reported two years ago as $65 per thousand cubic
meters.
NEW AUDIT OF PETROLEUM RESERVES
4. (SBU) In late December, President Berdimuhamedov ordered yet
another audit of Turkmenistan's oil and gas reserves (the last one
was conducted about four years ago, in connection with a possible
Trans-Afghanistan pipeline). The President commented that the audit
will help adjust the 2030 Petroleum Sector Development Plan, a plan
many experts consider too ambitious. It is still not clear,
however, whether the results will be made public. A recent public
announcement that Turkmenistan did not produce the planned 20
million tons of oil in 2007 could also be prompting President
Berdimuhamedov to reconsider the 2030 Plan production targets.
BURREN SOLD, WHILE LUKOIL REMAINS WITHOUT A PSA
5. (SBU) The UK-registered hydrocarbon firm, Burren Energy,
unexpectedly announced that it had been acquired by an Italian firm,
Eni, for $3.6 billion. We hear the Government of Turkmenistan was
not pleased by Burren's failure to inform it prior to the public
announcement. Just a few weeks later, an apparently premature press
announcement that LukOil had signed a memorandum of understanding
for some Caspian blocks reportedly elicited such a strongly negative
reaction in Ashgabat that LukOil was forced to issue a retraction
the next day.
HOAGLAND