Turkmenistan’s contacts with Russia have picked up in recent months, heightening speculation that Ashgabat is positioning itself to renew gas supplies to its erstwhile top customer.
President Gurbanguly Berdymukhamedov and his Russian counterpart, Vladimir Putin, spoke by phone this week, ostensibly to discuss regional issues and cultural exchanges. (Neither the Russian nor Turkmen news agencies provided details, as usual, though Turkmenistan.ru boasted that the Russians initiated the call.)
Earlier in the week, Svetlana Medvedeva, wife of Russia’s prime minister and former placeholder president, Dmitry Medvedev, received a prestigious memento during her trip to Ashgabat. Berdymukhamedov awarded her the Ruhubelent Order, one of the Turkmenistan’s highest state honors, for her work on improving ties between the two countries. Medvedeva is not known for previously showing any interest in the gas-rich desert nation.
Berdymukhamedov and Putin also spoke by phone the previous week. And they spoke in July when Putin called to congratulate Berdymukhamedov on his birthday. At the time, Putin and Medvedev also sent congratulatory letters. Perhaps Medvedev’s specific reference to the grand time the two shared in Rio de Janeiro – at the UN Conference on Sustainable Development in June – helped land his wife the Turkmen trophy.
While Turkmenistan’s gas exports to China are increasing, revenues from these sales are earmarked to repay soft loans that China issued when the initial pipeline deal was signed. Turkmenistan sells modest supplies of gas to Iran, too, though the amount is only half the pipeline capacity, probably due to the sanctions hitting Tehran.
Since falling out in 2009, Russia has been buying only 20 percent of the Turkmen gas it once purchased.
All this makes it clear that Turkmenistan’s cash flow is not what it was, though Berdymukhamedov is still spending profligately, most noticeably on an $8-billion Olympic Village, which will host the 2017 Asian Olympic Indoor and Martial Arts Games. In Ashgabat, speculation is rife that the president has dipped into former dictator Saparmurat Niyazov’s infamous multi-billion dollar personal Deutsche Bank accounts to fund government operations while he bargains for new buyers.
Russia, meanwhile, has played hardball, knowing Berdymukhamedov has limited options.
Next month’s CIS Summit in Ashgabat would be an opportune time for a deal to be announced. Though neither Putin nor Berdymukhamedov seems to respect or trust the other, they could hardly argue that a deal would not be mutually beneficial – it would shore up Ashgabat’s balance sheet, while allowing Putin to re-stake Russia’s claim as Turkmenistan’s economic tether.