Identifier
Created
Classification
Origin
09ASHGABAT393
2009-03-27 08:57:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: CHINA KNOWS PATIENCE PAYS OFF HERE,
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000393
SIPDIS
SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/26/2019
TAGS: PGOV EINV EPET TX CH
SUBJECT: TURKMENISTAN: CHINA KNOWS PATIENCE PAYS OFF HERE,
ESPECIALLY IN THE ENERGY SECTOR
Classified By: DCM Sylvia Reed Curran for reasons 1.4 (b) and (d).
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000393
SIPDIS
SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/26/2019
TAGS: PGOV EINV EPET TX CH
SUBJECT: TURKMENISTAN: CHINA KNOWS PATIENCE PAYS OFF HERE,
ESPECIALLY IN THE ENERGY SECTOR
Classified By: DCM Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY: The Chinese ambassador to Turkmenistan
described the relationship with Berdimuhamedov's government
as positive, yet more stand-offish than in former President
Niyazov's time. That said, CNPC is making progress on its
Turkmenistan-China pipeline, although only half of this twin
line is scheduled to be finished by the end of the year. He
was somewhat pessimistic about the potential for CNPC to
acquire additional concessions in Turkmenistan, but it was
likely to try anyway. China appears to expect that, while
the pipeline will be completed in the near term, increased
production needed to fill the pipeline is farther off.
Nonetheless, they are okay with this scenario because they
think pipeline is what the Turkmen really want. As long as
they keep the Turkmen happy, they think everything else will
fall into place. END SUMMARY.
2. (C) A visiting scholar from the U.S.-based Center for
Strategic and International Studies met on March 19 with
Chinese Ambassador Wu Hongbin to learn more about the Chinese
role in oil and gas development in Turkmenistan. Ambassador
Wu shared some details about the Chinese National Petroleum
Corporation's (CNPC) project work in the Amu Darya region,
and the construction of the Turkmenistan-China pipeline.
3. (C) Wu said that the pipeline will actually be twin
pipelines, with the first due to be completed before the
December 2009 deadline, but the second one will take longer
to finish. CNPC is not concerned about how much gas it will
be able to export from Turkmenistan, although it believes it
will move 20 bcm per year, once the pipeline is fully
functional, he added.
4. (C) Although there is interest on the Chinese side, the
Chinese Government is unsure whether CNPC will be able to win
more concessions from Turkmenistan, the Ambassador said.
CNPC had concluded a contract with former President Niyazov
in late 2006 for a significant development project on the
South Yoloten field, he noted. CNPC has undertaken a small
portion of that project, but not on the scale of the original
agreement. (NOTE: It is unclear whether CNPC still retains
options in South Yoloten, or whether elements of the original
agreement were nullified after Niyazov's death. END NOTE.)
Niyazov was positively disposed toward a close relationship
with China, but President Berdimuhamedov does not seem to
want such a close relationship, Wu said. China finds it easy
to negotiate with the Turkmen Government, because the
President has no "number two guy" and there are no "court
factions" in the senior levels of government that can
interfere. Once negotiations with the President take place,
things seem to move forward largely without issue, he added.
5. (C) When asked how the Turkmen Government would respond
to a proposal for a U.S.-Chinese joint oil and gas project,
he offered the opinion that such a proposal would be
acceptable to the government. From the Chinese perspective,
however, he said it appeared that the Turkmen Government
sought more distance between itself and the United States
than it did between itself and China. The Chinese Government
believes that, in terms of looking to the West,
Berdimuhammedov wants a closer relationship with the
Europeans than he does with the United States, he added.
6. (C) COMMENT: China knows its patience could pay off in
the long run with Turkmenistan, and appears to be comfortable
with securing a means to transport the gas while making
actual gas production a second priority. Perhaps it assesses
that in the long term, helping Turkmenistan reach its export
ASHGABAT 00000393 002 OF 002
diversification goals with an international pipeline will
provide some political leverage. If and when the pipeline
reaches a point where it is transporting 30 bcm per year,
China will be able to provide a persuasive argument of the
ease and low cost of exporting additional supplies eastward.
Getting to a point where 30 bcm per year is going into the
pipeline, however, may be the more difficult task. END
COMMENT.
MILES
SIPDIS
SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/26/2019
TAGS: PGOV EINV EPET TX CH
SUBJECT: TURKMENISTAN: CHINA KNOWS PATIENCE PAYS OFF HERE,
ESPECIALLY IN THE ENERGY SECTOR
Classified By: DCM Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY: The Chinese ambassador to Turkmenistan
described the relationship with Berdimuhamedov's government
as positive, yet more stand-offish than in former President
Niyazov's time. That said, CNPC is making progress on its
Turkmenistan-China pipeline, although only half of this twin
line is scheduled to be finished by the end of the year. He
was somewhat pessimistic about the potential for CNPC to
acquire additional concessions in Turkmenistan, but it was
likely to try anyway. China appears to expect that, while
the pipeline will be completed in the near term, increased
production needed to fill the pipeline is farther off.
Nonetheless, they are okay with this scenario because they
think pipeline is what the Turkmen really want. As long as
they keep the Turkmen happy, they think everything else will
fall into place. END SUMMARY.
2. (C) A visiting scholar from the U.S.-based Center for
Strategic and International Studies met on March 19 with
Chinese Ambassador Wu Hongbin to learn more about the Chinese
role in oil and gas development in Turkmenistan. Ambassador
Wu shared some details about the Chinese National Petroleum
Corporation's (CNPC) project work in the Amu Darya region,
and the construction of the Turkmenistan-China pipeline.
3. (C) Wu said that the pipeline will actually be twin
pipelines, with the first due to be completed before the
December 2009 deadline, but the second one will take longer
to finish. CNPC is not concerned about how much gas it will
be able to export from Turkmenistan, although it believes it
will move 20 bcm per year, once the pipeline is fully
functional, he added.
4. (C) Although there is interest on the Chinese side, the
Chinese Government is unsure whether CNPC will be able to win
more concessions from Turkmenistan, the Ambassador said.
CNPC had concluded a contract with former President Niyazov
in late 2006 for a significant development project on the
South Yoloten field, he noted. CNPC has undertaken a small
portion of that project, but not on the scale of the original
agreement. (NOTE: It is unclear whether CNPC still retains
options in South Yoloten, or whether elements of the original
agreement were nullified after Niyazov's death. END NOTE.)
Niyazov was positively disposed toward a close relationship
with China, but President Berdimuhamedov does not seem to
want such a close relationship, Wu said. China finds it easy
to negotiate with the Turkmen Government, because the
President has no "number two guy" and there are no "court
factions" in the senior levels of government that can
interfere. Once negotiations with the President take place,
things seem to move forward largely without issue, he added.
5. (C) When asked how the Turkmen Government would respond
to a proposal for a U.S.-Chinese joint oil and gas project,
he offered the opinion that such a proposal would be
acceptable to the government. From the Chinese perspective,
however, he said it appeared that the Turkmen Government
sought more distance between itself and the United States
than it did between itself and China. The Chinese Government
believes that, in terms of looking to the West,
Berdimuhammedov wants a closer relationship with the
Europeans than he does with the United States, he added.
6. (C) COMMENT: China knows its patience could pay off in
the long run with Turkmenistan, and appears to be comfortable
with securing a means to transport the gas while making
actual gas production a second priority. Perhaps it assesses
that in the long term, helping Turkmenistan reach its export
ASHGABAT 00000393 002 OF 002
diversification goals with an international pipeline will
provide some political leverage. If and when the pipeline
reaches a point where it is transporting 30 bcm per year,
China will be able to provide a persuasive argument of the
ease and low cost of exporting additional supplies eastward.
Getting to a point where 30 bcm per year is going into the
pipeline, however, may be the more difficult task. END
COMMENT.
MILES