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Energy And More: Turkmenistan Improves Economic Ties With The U.S

  • Turkmenistan is improving economic ties with the U.S.
  • The priority for Ashgabat seems to be diversification.
  • Turkmenistan looks to Qatar as it aims to ramp up LNG exports.

In late August, the president of Turkmenistan signaled that the end was near for price caps for staple goods in state-owned stores. He has wasted no time.

As Vienna-based Chronicles of Turkmenistan reported on October 10, the cost of bread in government stores in the capital, Ashgabat, has quadrupled. And while the price of a flatbread has increased, the weight of a standard loaf has fallen.

Elsewhere in the country, expected amounts of price-controlled food have not been delivered at all, Chronicles reported.

These changes have not been compelled, however.

As the European Bank for Reconstruction and Development noted in its most recent Regional Economic Prospects review, sky-high global prices for energy resources have been kind to Turkmen coffers. 

“Turkmenistan has a healthy fiscal balance, supported by elevated gas revenues and low public debt. While official estimates are not available, inflation is likely to remain in low double digits, below the end-2021 level of 21 percent,” the authors of the review wrote.

Not that Turkmenistan is able to get anywhere as much of its fuel riches as it would like onto the world market. For the umpteenth time, President Serdar Berdymukhamedov called at an October 10 Cabinet meeting for implementation to be speeded up in the project to build the trans-Afghan TAPI natural gas pipeline.

Related: Saudi Arabia Expresses Its “Total Rejection” Of U.S. Statements About OPEC+

But at least practical work is being done. This week, a delegation of the Taliban-run government in Afghanistan visited Ashgabat to agree on an action plan on the TAPI project, Kabul-based outlet TOLO News reported on October 9.

“First, the two sides agreed to form a schedule for the acquisition of land and the pipeline construction. Second, the two sides agreed to establish a network to distribute gas to the residents of Herat and industrial parks,” Shafay Azam, head of the economic affairs department in the Taliban’s Foreign Ministry, was quoted as saying.

Berdymukhamedov likewise wants to see the tempo increased in getting the TAPI-parallel project to build a high-voltage power line to Afghanistan and then Pakistan and India off the ground. Attracting investors interested in working on that project and the construction of a more than 1,000-kilometer-long electricity grid ringing the country are “priorities,” he said.

Turkmenistan has been receiving much attention from an increasingly friendless Russia in recent months and years. That does not mean that relations with Ukraine have cooled, however.

In a long interview published in the state’s Neutral Turkmenistan daily on October 10, the Ukrainian ambassador to Ashgabat talked about how Kyiv deems Turkmenistan a key partner in Central Asia.

"Ukraine highly appreciates its relations with Turkmenistan, which are developing in the spirit of strategic partnership, and it looks forward to deepening further cooperation for the benefit of the people of both countries," Viktor Maiko told the newspaper.

Ukrainian companies have indeed scored some important successes in Turkmenistan.

In August, Ukrainian infrastructure builder Altcom started work on a new bridge along the western fringe of the Garabogazköl lagoon. The road will ease transport to Kazakhstan and is being billed as a promising way for freight companies to travel from Russia to the Persian Gulf.

Maiko namechecked several other companies – heavy machinery manufacturer Sumy NPO, infrastructure builder Interbudmontazh, steel pipes producer Interpipe, gas turbine maker Zorya-Mashproekt, and the Kriukiv Railway Car Manufacturing Plant – as success stories in Turkmenistan. And in the energy sector, Ukraine’s Yug-Neftegaz has signed a contract with Turkmenistan’s state geology agency to conduct surveys of the Goturdepe oil and gas field and in the South Burun region of western Turkmenistan.

No mention was made of the war in the interview.

Turkmenistan is enthusiastic about doing more business with yet another Russia foe: the United States.

A group of U.S. executives and Washington’s man in Ashgabat got on a videoconference call with several top Turkmen officials on October 5 for a routine meeting of the Turkmenistan-U.S. Business Council. The companies represented included several big-ticket names like John Deere, Case New Holland, Boeing, Exxon Mobil, General Electric, Coca-Cola, Caterpillar and Visa. Discussions included a possible visit to Turkmenistan by a delegation of American businesspeople before the close of the year.

The priority for Ashgabat seems to be diversification. Turkmenistan wants to be seen as an investment destination in areas other than just energy.

Also on October 5, Deputy Foreign Minister Vepa Khadzhiyev, who has served as his government’s point-man on Afghanistan, met with Paul Dean, the Principal Deputy Assistant Secretary in the U.S. Bureau of Arms Control, Verification and Compliance, for talks. The ministry’s statement offered sparse detail, noting merely that the “parties considered issues on the regional and international agenda [and] stressed the need to effectively counter modern challenges and threats, and discussed … confidence-building measures in arms control.”

Berdymukhamedov is poised for some international travel. He is due to travel to Kazakhstan for a state visit on October 15. That schedule suggests he will not, however, be attending a Central Asia-Russia summit of heads of state to take place in Astana on October 14.

The president is also being awaited in Qatar. The Foreign Ministry in Ashgabat and the chargé d'affaires at the Qatari Embassy met on October 8 to discuss preparations for that upcoming visit. No date has been announced.

Talk in Doha is bound to concentrate heavily on the subject of natural gas. Qatar outmatches even Turkmenistan for the size of its confirmed gas reserves. What is more, it is far better positioned, geographically, financially, and technologically, to get that fuel onto the world market.

Turkmenistan can only look on with envy at Qatar’s liquid natural gas-producing capabilities. But it is trying to make progress on this front. Last month, Berdymukhamedov heard a report from Shahym Abdrahamov, the deputy prime minister with the portfolio for oil and gas, on a project to modernize the Bagajin gas refining and liquified gas production facility.

At present, the Turkmenbashi complex of oil refineries produces more than 300,000 tons of LNG, which is around two-thirds of what the country produces overall. The government is ambitious for the figure to grow, and fast. Cooperation with Qatar may be key to achieving this.

By Eurasianet.org

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