Identifier
Created
Classification
Origin
09MOSCOW3049
2009-12-18 15:02:00
CONFIDENTIAL
Embassy Moscow
Cable title:  

MFA SAYS RUSSIA-TURKMENISTAN RELATIONS STRONG; GAS

Tags:  PREL PGOV ENRG TX RS 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003049 

SIPDIS

DEPT FOR EUR/RUS, SCA, EEB, INR

E.O. 12958: DECL: 12/18/2019
TAGS: PREL PGOV ENRG TX RS
SUBJECT: MFA SAYS RUSSIA-TURKMENISTAN RELATIONS STRONG; GAS
ANNOUNCEMENT SOON

MOSCOW 00003049 001.2 OF 002


Classified By: Political Minister Counselor Susan M. Elliott for reason
s: 1.4 (b),(d).

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003049

SIPDIS

DEPT FOR EUR/RUS, SCA, EEB, INR

E.O. 12958: DECL: 12/18/2019
TAGS: PREL PGOV ENRG TX RS
SUBJECT: MFA SAYS RUSSIA-TURKMENISTAN RELATIONS STRONG; GAS
ANNOUNCEMENT SOON

MOSCOW 00003049 001.2 OF 002


Classified By: Political Minister Counselor Susan M. Elliott for reason
s: 1.4 (b),(d).


1. (C) Summary. The MFA continues to emphasize Russia's
stable political relations and growing economic and cultural
ties with Turkmenistan, despite the recent impasse over gas
shipments. Eager to maintain influence in the region despite
Gazprom's gas glut, President Medvedev has agreed with
Turkmen President Berdimuhamedov on new terms to resume gas
deliveries and could announce the agreement by the end of the
year. President Medvedev plans to visit Ashgabat on December
22, ostensibly to open a new Russian school. Meeting on
November 29, the two presidents discussed several other
energy transit proposals that could involve Russian
construction companies and Afghanistan as a transit country.
Russia has not convinced Turkmenistan to join regional
groupings such as the CSTO or SCO, but appears comfortable
with Turkmenistan's "neutral" status if it means no U.S.
bases in the country. End Summary.

All is Well, Despite Gas Impasse
--------------

2. (C) In a meeting on December 11, MFA Third CIS Department
Counselor Vladimir Sterligov told poloff that Russia enjoys
stable and friendly political relations and deep cultural and
economic ties with Turkmenistan, noting that President
Medvedev had met with Turkmen President Berdimuhamedov three
times already this year. He maintained the April 2009
pipeline explosion and subsequent impasse over gas shipments
had not damaged relations and that an agreement to resume gas
deliveries would be announced soon. Sterligov did not
speculate on the precise cause of the pipeline accident that
halted Turkmen gas shipments to Russia, but explained that
weaker European demand for gas had prompted Russia to reduce
its import volumes even before the incident. Sterligov said
Russia supported Turkmenistan's new gas transit routes to
China and Iran and dismissed speculation that the new routes
compromised Russian interests. Noting that construction on
the projects commenced long before the halt in gas exports to

Russia, Sterligov estimated that China would receive 6 bcm of
Turkmen gas in 2010 and as much as 30 bcm annually within two
or three years, while Iran would receive an annual volume of
16 bcm within a year. Some analysts have commented that
Moscow and Gazprom are supportive of the China gas deal
because it ensures less Turkmen gas would be available for a
trans-Caspian pipeline, a project that could compete with
Gazprom in supplying gas to the European market.

Gas Agreement Reached...Announcement Soon
--------------

3. (C) Sterligov said that in their November 29 meeting,
Medvedev and Berdimuhamedov gave their blessing to a deal
between Gazprom and Turkmengaz on the resumption of Turkmen
gas shipments. He said that the two sides had already agreed
on the main issues of price and volume and were now working
out technical details of the new agreement. Sterligov did
not say what the price and volume levels were, but said that
volumes would be significantly less than the previous 40 bcm
per year and that prices would reflect new realities of the
market. While he said there were no plans for Medvedev to
announce a new gas agreement during his planned visit to
Ashgabat on December 22, Sterligov did not rule it out. He
speculated that an agreement would likely be announced by the
end of the year, given the intense political pressure for a
deal and Turkmenistan's worsening budgetary problems stemming
from the loss of gas revenue.


4. (C) Comment: By some accounts Gazprom has up to 200 bcm
of spare capacity and has no need for Turkmen gas, not even
for the 10-12 bcm that Gazprom has suggested it will import
in 2010. However, at the right price, and under the right
terms, which will surely remain a secret, there is likely a
way for both sides to profit from the trade. Even while
ceding 30-40 bcm per year of Turkmen gas to China, Russia
knows that cutting off its gas link to Turkmenistan
completely would threaten its political and economic
influence in the region. End Comment.

MOSCOW 00003049 002.2 OF 002



Russian Firms Eyeing Turkmen Energy Projects
--------------

5. (C) Sterligov said that in November the two presidents
also discussed a proposal for the sale of surplus Turkmen
electricity to Tajikistan via Afghanistan, a project that
could involve Russian construction firms. Sterligov
acknowledged that stability in northern Afghanistan would be
a prerequisite for such a project, but that the Afghan route
looked promising given Uzbekistan's recent departure from the
Central Asian unified energy grid and Tajikistan's need for
electricity in winter months. He added that another proposal
for a Turkmen gas pipeline to Pakistan and India would also
transit Afghanistan. According to Sterligov, the presidents
also discussed the recent tender for the construction of a
domestic pipeline to connect gas fields in eastern
Turkmenistan with its existing pipeline network along the
Caspian Sea. Sterligov said that while Gazprom did not
participate, Russia's StroyTransGaz, along with Western
companies, had tendered an offer and was awaiting the results.

Turkmen "Neutrality"
--------------

6. (C) Sterligov conceded that Turkmenistan guarded closely
its "neutrality" and has shown no desire to join regional
organizations such as the CSTO or SCO. Although, he said
that Turkmen representatives had consulted with SCO officials
in Beijing, and he could not rule out their becoming
observers at sometime in the future. Comment: Sterligov also
said that Turkmenistan has shown no interest in serving as a
base for NATO operations in Afghanistan. Given its unease
with U.S. bases in Central Asia, Russia is likely comfortable
with Turkmen "neutrality" if it means no NATO troops on its
soil. End Comment.

Strong Educational Ties
--------------

7. (C) Sterligov maintained that the primary purpose of
Medvedev's trip was to open a new Russian-language School, a
modern facility named for Alexander Pushkin and funded at
least in part by Gazprom. He explained that the school
opening is part of a rich tradition of educational exchange
with Turkmenistan that began during Soviet times and
continues today with hundreds of Turkmen students studying in
Russian universities, particularly in the areas of petroleum
engineering and geology. He also noted that Moscow's
prestigious Gubkin Academy of Oil and Gas recently opened a
branch in Ashgabat.
Beyrle