Understanding the Turkish-Turkmen Gas Embrace

Although Turkey and Turkmenistan like to praise their fraternal “bone brotherhood” and their eternal friendship, but cooperation on natural gas continues to elude them. However hope springs eternal: at the end of May the two sides signed yet another agreement on delivering Turkmen gas to Turkey. Given the myriad difficulties in doing so, what exactly are they expecting to achieve?

The agreement, signed by Turkish President Abdullah Gül and his Turkmen counterpart Gurbanguly Berdimuhamedov in Ashgabat on 30 May, is admittedly light on specifics. A statement by Turkmenistan’s state-controlled press simply said that the two discussed “projects in the sphere of supplying Turkmen natural gas to Europe” and signed an agreement to that effect. Headlines simply reported that the two sides were cooperating on supplies to Europe.

Those with good memories will recall that we have been here before: most recently last September, but also in 2011, 2010, and various other times in the past decade. And as far back as 1999 Turkish ministers were predicting that Turkmen gas would begin flowing to Turkey by 2002, after the two sides signed a contract that year for 16bcm of Turkmen gas.

The plan is that Turkmen gas would come across the Caspian Sea in a Trans-Caspian Pipeline, across Azerbaijan and into the Trans-Anatolian Pipeline (TANAP), the Turkish leg of the EU-backed Southern Gas Corridor to Europe. From there some would be taken off to feed Turkish domestic demand, and some would then join the next leg of the Corridor into Europe – either through transit or through purchase and resale by Turkey, a distinction which Ankara has never made clear.

This is a fine idea in principle; Turkmenistan has huge reserves (and is looking west for exports), Turkey is desperate for new sources of natural gas to replace costly Russian and Iranian imports, and the EU is looking to diversify its gas suppliers. But there are two rather insurmountable obstacles.

The first is a Trans-Caspian Pipeline. As regular Caspian-watchers know full well, this project is extremely unlikely to get off the ground (or rather under the sea). Russia and Iran staunchly oppose it for ‘environmental’ reasons, usually seen as cover for their hostility to a competitive outlet for Turkmen gas; Azerbaijan remains reluctant to commit to supporting it, fearing competition, and is unwilling to move until its maritime border with Turkmenistan is settled; and Turkmenistan is constantly being wooed with more attractive offers from China.

Turkey’s growing interest in Turkmen gas has naturally led it to growing interest in a Trans-Caspian Pipeline. Back in September, after a summer of disputes between Baku and Ashgabat over their maritime border, Ankara offered to mediate in the row (not a new idea). There are two issues here. One is that the border issue is, many experts concede, now largely irrelevant from a legal point of view. It is not the fine points of the demarcation line that are preventing a TCP from being built, but the politics.

The second and related issue is that Turkey cannot be an effective mediator because – for all the regional goodwill it enjoys – neither side has enough interest in getting a TCP built to enthusiastically accept mediation. Lacking the sticks of reprisal, Turkey is forced to rely on the carrots of incentive – in other words, telling Turkmenistan to accept a pipeline (probably to be built by a Western-led consortium) and we’ll happily buy your gas. The problem here is that there is no incentive for the Azerbaijani side. 

In fact that is the second obstacle to the Turkish-Turkmen gas embrace. Turkey has tended to look at the issue as just a matter for the buyer and the seller. Azerbaijan has not really been included in Turkey’s gas negotiations, even though it is clearly a critical part of the corridor. Is Turkey seeking to put pressure on Azerbaijan by reaching beyond it to Turkmenistan?

In this reading, Turkey would be attempting to strengthen its bargaining position with Azerbaijan on prices, as well as its role as a gas hub vis-à-vis the EU, by bringing Turkmenistan’s vast reserves westwards and then presenting it as a fait accompli to Azerbaijan. But this seems short-sighted, given that Azerbaijan is integral and would need to be firmly enlisted in a TCP.

A more realistic scenario is that Turkey is simply trying to change the atmosphere, softening up Turkmenistan and making it aware of how attractive the western export route would be. But again, this strategy founders on Azerbaijan’s lukewarm attitude towards a Trans-Caspian Pipeline. It is, ultimately, competitive for its own gas in the medium-term.

Whatever Turkey’s good intentions, Azerbaijan has no intention of turning it into a gas hub unless that gas is first and foremost from Azerbaijani fields. Its state oil company SOCAR is determined to maintain a majority stake in the TANAP project and will have the final say on what gas goes into it. And for the foreseeable future, that will be Azerbaijani gas, not Turkmen gas.

Perhaps one day President Gül will manage to get his Turkmen and Azerbaijani counterparts in a room together and get all three to sign a concrete agreement on a Trans-Caspian Pipeline. But until then Turkey and Turkmenistan will have to keep gazing wistfully at each other, their gas embrace denied by hard political realities.

Alex Jackson is an analyst of political, energy and security issues in the Caspian region. He is based in London and can be contacted at ajackson320@gmail.com.