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Turkmenistan: Chinese Deal Helps Stall Trans-Caspian Pipeline, Deter Caspian Conflict

As Turkmenistan continues to pursue its own pipeline projects -- primarily with Beijing, but also promoting the Turkmen-Afghanistan-Pakistan-India (TAPI) pipeline and indicating some support for the Trans-Caspian Pipeline -- Russia has become increasingly belligerent. Maybe this is just to gain a bargaining position, as there are indications that Turkmenistan's new gas deal with China will help delay the Trans-Caspian Pipeline between Turkmenistan and Azerbaijan, designed to circumvent Russia.

But could the Kremlin really start a war over the monopolist Gazprom losing one third of its business due to the TCP, if Turkmenistan really has enough gas -- and foreign investments -- to supply all comers?

The Bug Pit has asked the question of whether Russia would start a war, quoting various Russian analysts including Mikhail Aleksandrov of the Institute of CIS Countries: "Remembering what NATO did in Yugoslavia, Afghanistan, Iraq and Libya, Russia has no barriers, moral or legal ones, for the use of force in the Caspian Sea."

The theory is that Russia would need a pretext to start military action -- but past experience shows that Moscow can exploit accidents (or -- as some in Ashgabat darkly hint -- cause them) such as the explosion in April 2009 on a Turkmen pipeline which triggered (or displayed?) deteriorating relations between Russia and Turkmenistan. The two countries are still arguing over whether it was Gazprom's fault for shutting off gas too quickly when it sharply reduced purchases after failing to get a lower price, or Turkmenistan's fault for having aging infrastructure.

Past experience has also shown that Russia can force other countries to allow themselves to be provoked -- as it did with Georgia. Could this happen with Turkmenistan?

Berdymukhamedov has simplified what might be an otherwise complicated Caspian life by not fully committing to the TCP and just selling most of his gas to China for now. China for its part is no doubt enjoying the easy access to Turkmen gas as it strengthens its bargaining position with Moscow.

Annadurdy Hadjiev, a Turkmen economic analyst based in Bulgaria told News Briefing Central Asia that says Beijing wants to hold down the price it pays for Turkmen gas so that it can then cite this in negotiations with Moscow. Given the huge investment China has made so far in Turkmenistan in the form of soft loans (more than $8 billion), Berdymukhamedov can't really drive up his price.

There's another angle to the bargaining pointed out by Dr. Robert M. Cutler in the Asia Times. Russia's daily Kommersant quoted an unnamed Chinese diplomat as saying Beijing will "do its best" to make sure the TCP "is not developed" because "China does not want Turkmenistan to use European prices to bargain for an increase in prices to China."

So even as it loses bargaining power with China over Beijing’s new bigger gas deal with Turkmenistan, Russia now has China on its side to scupper the TCP. It's interesting that the Russian press fills up with snide claims that Turkmenistan doesn't have enough gas for all its customers when talks are in progress with the EU, but seems to hold back when the talks are with China.

Says Cutler:

Russia shares with China the wish to prevent Turkmenistan's gas from reaching Europe, so that Gazprom may maintain its already large market share, which is set to grow further if the capacity of the Nord Stream pipeline under the Baltic Sea to Germany is doubled, as has been bruited.

This is good news for peace in the Caspian, but Russia may still not let up on the rhetoric, just in case. The Kremlin is also now letting it be known that it can count on Kazakhstan, its stalwart partner in the Eurasian Customs Union, to take its side on Caspian disputes. Sergei Kulikov, writing for the Russian daily Nezavisimaya Gazeta reported that Kazakh President Nursultan Nazarbayev called the prospects for the TCP "very foggy" and wheeled out the head of Astana's state-owned energy company KazMunayGaz to say that Kazakhstan would not cooperate with the TCP until the Caspian legal status as a whole was resolved (i.e. Iran's demand to make a five-way split versus the insistence by other littoral states to control resources within their boundaries -- and solving the border dispute between Turkmenistan and Azerbaijan bilaterally). Moscow insists on stalling any and all pipelines related to the Caspian until the five states resolve the division of resources.

Kulikov also invoked Russian experts likening the current Caspian conflict to the war with Georgia in 2008, and says the EU is telling Russia to back off the TCP by threatening not to cooperate with South Stream, a threat EU energy commissioner Günther Oettinger has made explicit.

"The method of force is the only possible response to this problem [of the TCP]," Konstantin Simonov, director of the Fund for National Energy Security told Nezavisimaya Gazeta. Pragmatically, Simonov noted that the fact that construction on the TCP hasn't begun yet (talks have dragged on for 15 years) indicates that the West "hasn't given Ashgabat a 100-percent guarantee of defense from the Russian Federation's military reaction."

"Only the experience of the August war in Georgia is deterring Ashgabat today," added Simonov.

Ashgabat doesn't seem to need deterring, however, as it has never fully committed to the TCP and still hasn't resolved its border dispute with Azerbaijan. Russia, Iran, and Kazakhstan may all line up to bully Turkmenistan and Azerbaijan -- and the EU -- over the TCP (and by extension -- the US). But now the dominant Caspian littoral states have China tacitly on their side, and can afford to stand back and watch the EU's grip on the Caspian loosen.

Turkmenistan: Chinese Deal Helps Stall Trans-Caspian Pipeline, Deter Caspian Conflict

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