Turkmenistan is considered to have one of the largest natural gas reserves in the world, with vast reserves of both conventional and unconventional gas. The country’s natural gas reserves are estimated to be around 17.5 trillion cubic meters in 2020, which makes it the fourth largest natural gas reserve after Russia, Iran and Qatar. Although Turkmenistan has one of the largest reserves in the world, they fall short in the production of natural gas.
Turkmenistan’s vast natural gas reserves have played a significant role in shaping its relationship with Russia. Historically, Russia has been one of the largest consumers of Turkmen natural gas, and the two countries have maintained close economic ties in this area. After its independence in 1991, Turkmenistan exported natural gas only to Russia, which wanted to prevent it from becoming a competitor, due to the already existing infrastructure.
However, this relationship has not been smooth, and there have been instances where disputes over pricing, transit, and other issues have strained their relationship. For example, Russia and Turkmenistan constantly have had disagreements over the price of Turkmen natural gas exports to Russia. These disputes have sometimes resulted in temporary disruptions to the supply of Turkmen gas to Russia, which has had an impact on the economic relationship between the two countries.
In 2003, a 25-year agreement was signed between Turkmenistan and Russia for 70-80 billion cubic meters per year. Until 2009, only 40-50 billion cubic meters of gas were exported, and in 2015, this figure dropped to 4 billion. Throughout Turkmenistan’s dependence years, Russia wanted to buy natural gas at a cheaper price, while making the payments 2-3 years behind.
Another area of dispute has been over transit fees for the transportation of Turkmen natural gas to Russia and other countries. Turkmenistan has sought to negotiate higher transit fees for its gas, while Russia has sought to keep these fees at a lower level to maintain its competitive advantage in the region.
Despite these challenges, Russia and Turkmenistan have continued to work together in the natural gas sector, recognizing the importance of their relationship in this regard. They have been cooperating on various projects aimed at increasing the efficiency and reliability of their natural gas production and export operations, and both countries have a vested interest in maintaining stability and predictability in the supply of this vital energy source.
In recent years, Turkmenistan has sought to diversify its natural gas export markets and reduce its dependence on Russia. This has included the construction of new pipelines to transport its gas to China and other countries in the region, as well as efforts to increase its domestic consumption. The Turkmenistan-China gas pipeline is transporting natural gas from Turkmenistan’s vast gas reserves to China’s growing energy market. The pipeline was completed in 2009 and has been in operation ever since, supplying China with a significant amount of its natural gas needs. As a result, Russia’s share of Turkmenistan’s natural gas exports has declined, which has had an impact on the economic relationship between the two countries.
While reducing Turkmenistan’s dependence on Russia for natural gas production and distribution, The Turkmenistan-China gas pipeline is an important component of China’s energy security strategy, as it helps to reduce its dependence on foreign oil and other energy sources.
The Turkmenistan-China gas pipeline has been a significant source of revenue for Turkmenistan and has helped to support the country’s economic development. At the same time, it has also helped to strengthen the relationship between Turkmenistan and China, as the two countries continue to work together on projects aimed at developing and expanding their natural gas production and export capabilities.
However, there have also been some disputes between the two countries regarding the gas pipeline and natural gas supply from Turkmenistan to China. Some of the disputes have centered around issues such as pricing, transit fees, and the reliability of the pipeline and the supply of natural gas.
For example, in the past, there have been instances where Turkmenistan has sought to renegotiate the price of its natural gas exports to China, while China has sought to maintain the existing pricing arrangements. These disputes have sometimes resulted in temporary disruptions to the supply of Turkmen gas to China, which has had an impact on the economic relationship between the two countries.
Another area of dispute has been over the transit fees for the transportation of Turkmen natural gas to China through the pipeline. Turkmenistan has sought to negotiate higher transit fees for its gas, while China has sought to keep these fees at a lower level.
As a result of lower prices on transportation and natural gas production in Turkmenistan, in 2017, Turkmenistan announced that they will start to charge people for the use of water, natural gas, and electricity. These amenities have been provided as free public services since 1991, however, due to irregular payments and purchases by Russia and Iran and the energy crisis, Turkmenistan does not provide amenities for free since 2019.
While Turkmen gas can be a possible alternative to Russia for the ever-growing energy crisis in Europe, Turkmenistan cannot find a way to export gas due to its land borders. Although the littoral states partially agreed on the gas pipeline in 2018, Iran and Russia are opposing a pipeline under the Caspian Sea.
This possible alternative for Russian natural gas has been sought not only by Europe but also by neighboring countries such as Turkey and Azerbaijan. Last year on December 14, three leaders, Berdimuhamedov, Aliyev and Erdoğan held a meeting to discuss further cooperation in a variety of areas, including energy and transportation.
Although with a relatively much smaller gas reserve compared to Turkmenistan, Azerbaijan is already exporting natural gas to Europe, however, the energy crisis does not seem to get anywhere close to being solved in the continent. Turkey already plays a role in transporting Azeri gas to Europe with the Anatolian natural gas pipeline. In the aforementioned meeting, Erdoğan expressed Turkey’s willingness to take a part in a project that can carry Turkmen gas to Europe.
Although such a project would damage Turkey-Russia relations in the light of Russia’s ongoing war with Ukraine, in which Erdoğan is actively seeking a mediator role, Erdoğan seems to be in search of further geographical advantage and a bargaining.
By The European Institute for International Law and International Relations.
