On December 6, 2023, the Intergovernmental Turkmen-Turkish Commission on Economic Cooperation held a meeting in Ashgabat. The participants focused their attention on the prospects of Turkmen gas supplies to Turkey via Iran. Prior to this event, Turkmenistan had expressed its intention to expand gas exports to the West during the Summit of the Organization of Turkic States, which was announced by the Chairman of the Halk Maslakhaty of the Milli Gengesh of Turkmenistan, Gurbanguly Berdimuhamedov, who acted as an observer. Incidentally, Trans-Caspian supply routes were mentioned at that time.
Turkey is a significant market on its own right, but Turkmenistan aims not only to supply gas to this state but also to expand gas exports to the European market, leveraging its developed pipeline and port infrastructure. This is now a major part of the republic’s foreign policy.
Turkmenistan has practically exhausted its current export routes: the volume of gas supplies to other countries remains at the 2011 level of 35 billion cubic meters per year. Expanding supplies along the existing routes is proving to be a challenge for the republic. Currently, it is the largest gas supplier to China, which accounts for over 97% of Turkmenistan’s gas exports. China’s approval of the fourth pipeline (Line D) of the Central Asia-China gas pipeline is encouraging. However, it may take years before it becomes operational. During this time, other Central Asian republics and Russia’s involvement in the “Gas Union” may reduce the share of Turkmen gas in the new pipeline. Since 2023, Russia has been active in the Central Asian market. This has led to a loss of positions for Turkmen gas in the region. The contract with Iran for new supplies from Turkmenistan, concluded in mid-2023, can be considered a success in the southern direction. However, it is important to note that Turkmen gas is only needed by the northern provinces of Iran. Despite this, Iran remains one of the largest gas exporters in the world. The prospect of Turkmen gas supplies to Pakistan via Afghanistan is also subject to the promotion of the Pakistan-Russia gas deal and the Pakistan Stream Gas Pipeline.
Finding new buyers for the country’s main resource is limited to trying to enter the European market in the coming years. Turkmenistan heavily relies on gas exports, which make up over 80% of its budget revenues. Therefore, the country’s economic development and well-being are closely tied to the success of these efforts.
To facilitate the transit of Turkmen gas through Iran, Turkmenistan addressed important issues in its relations with the Islamic Republic of Iran. During the November 17–18 meeting of the Intergovernmental Turkmen-Iranian Commission on Economic Cooperation and the Turkmen-Iranian business forum, the parties discussed Iran’s debt to Turkmenistan for gas supplies. In the course of these talks, the parties expressed their mutual willingness to increase the supply of natural gas to Iran. The $1.8 billion debt issue was proposed to be resolved with a concession from Turkmenistan. Iran will provide funds and specialists for road construction in the republic. During the meeting, Turkmenistan’s representatives expressed interest in supplying equipment for oil and gas infrastructure to increase exports.
Turkmenistan has intensified its efforts to organize export routes in the Caspian region. On November 28, high-ranking representatives from Turkmenistan and Azerbaijan discussed the prospects for developing communication. On December 5, the Russian Foreign Minister participated in the meeting of the Foreign Ministers of the Caspian Littoral States in Moscow. He emphasized the need to expedite the construction of the Trans-Caspian Pipeline connecting Turkmenistan and Azerbaijan to achieve the goals outlined above. Under the terms of the Convention on the Legal Status of the Caspian Sea, signed in 2018, such construction is impossible without the consent of all littoral states.
Turkmenistan has every reason to speed up the implementation of its plans to supply gas to the countries of the European Union. With supplies from Russia dwindling in recent years, the country is rushing to take advantage of gas shortages in Europe. The leadership of Turkmenistan is aware of a clear “deadline.” The country must pay off all its transport and infrastructure costs and sell as much gas as possible to one of the largest markets in the world.
This “deadline” is based on two specific dates. For one, the European Union has set a target to phase out fossil fuels completely by 2050. However, this goal is incompatible with increasing gas imports from Turkmenistan. Meanwhile, a number of countries, including member states of the European Union, joined the agreement to reduce methane emissions into the atmosphere during the COP28 climate change conference in Dubai in December 2023. Recall that some environmentally hazardous emissions arise from natural gas production.
Turkmenistan loses significant profits for every year of delay in this situation. The country has invested a significant amount in a program to reduce methane emissions from its largest fields. This is to meet existing EU environmental standards. The country has also joined the methane obligation, recognizing the need to comply to compete for the European market. However, methane leaks persist. Addressing this issue was the topic of discussion between President of Turkmenistan Serdar Berdimuhamedov and US Special Presidential Envoy for Climate John Kerry on November 27 of last year. The United States is determined to find an alternative to Russian gas supplies for Europe, while also taking into account European environmental ambitions. The United States is currently providing the most assistance to Turkmenistan in reducing methane leaks.
Thus, Turkmenistan’s conscious, orderly, and consistent efforts to compete for a new market of unprecedented scale have become evident in recent months. The prospects for these efforts remain dim. Time itself seems to be working against the republic. It is also worth taking into account the geographical proximity to Europe of major gas exporters such as Algeria, Libya and Egypt, which are able to supply gas at lower prices and in much larger quantities. The share of the United States has significantly increased, indicating relative benefits from this country’s technological support to Turkmenistan, but not absolute benefits.
Boris Kushkhov, Department of Korea and Mongolia, Institute of Oriental Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”