Turkmenistan sign gas deal with Turkey

May 24, 1999 02:00 AM

Turkmenistan signed a deal on natural gas supplies to Turkey, a key prerequisite for building a planned pipeline through the Caspian Sea.
At the same day Turkmenistan halted natural gas supplies to Ukraine over mounting debts, leaving Ukraine without a crucial source of gas.
Turkmenistan, a gas-rich but impoverished former Soviet republic in Central Asia, has long been eager to strike a deal with more reliable customers, such as Turkey and European countries.

The deal calls for Turkmenistan to supply up to 16 bn cm of natural gas to Turkey annually, and ship another 14 bn cm through Turkey to Europe. That would increase Turkmenistan's export revenues many times over.
The gas will go through a pipeline scheduled to start construction at the end of this year and be completed by 2002, Turkmen President Saparmurad Niyazov said at the signing ceremony in the Turkmen capital, Ashgabat.
The pipeline would run through the Caspian Sea, Azerbaijan and Georgia.

The plan faces stiff competition from other proposed projects, however, as the region's governments scramble for shares of the coveted Turkish market.
To get funding for the $ 2.0 bn to $ 2.5 bn project, Turkmenistan needs to secure fixed gas sales.
Construction may be delayed amid disagreements among the five nations on the Caspian Sea _ Turkmenistan, Azerbaijan, Kazakhstan, Russia and Iran _ on the division of the sea and its rich reserves.
The U.S. government has backed Turkmenistan's trans-Caspian project because it circumvents Iran.

Turkmenistan's huge gas resources remain largely untapped, with relatively small volumes exported to Iran and Ukraine.
Turkmenistan has supplied 8.7 bn cm of gas to Ukraine since the beginning of this year, worth $ 318 mm. But Ukraine owes Turkmenistan $ 900 mm for gas debts mounting since 1993.
Niyazov said that he spoke with Ukrainian President Leonid Kuchma and Kuchma promised to clear up the debts. In the meantime, Turkmenistan halted gas supplies.
Ukraine is the world's sixth largest gas consumer and imports most of the gas it uses annually. Much of the imports come from Russia, but Ukraine has built up huge debts to Russia and had turned to Turkmenistan for gas to reduce its reliance on Russia.

Source: AP via Newspage
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