Pipeline dreams

This week, Turkmenistan and Russia will be gearing up to discuss technical aspects of the Littoral Gas Pipeline (LGP) which will skirt the eastern shore of the Caspian to take Turkmen gas to Russia via Kazakhstan.

A preliminary agreement was reached during President Vladimir Putin's visit to Central Asia in May, which also envisaged the expansion and modernisation of the existing Soviet-built Central Asia-Centre pipeline. Turkmenistan's new president, Gurbanguly Berdymukhammedov did not rule out the possibility of constructing other pipelines, such as the US-backed Trans-Caspian line under the Caspian Sea and a new outlet to China. And when he visited Beijing in July, he discussed reviving a project to supply China with gas from the Turkmen Bagtyyarlik field, starting in 2009. This would require construction of yet another pipeline.

Ashgabat's pipeline ambitions are remarkable given the high construction costs involved and questions over the country's ability to deliver the promised gas. Long-term contracts with Russian gas giant Gazprom require it to supply 60 billion cubic metres per annum from 2009, while construction of the LGP will mean that this will have to rise to at least 90 billion. Berdymukhammedov is keen to create leverage in his country's relations with Russia, but the commitment to international customers is not being matched by necessary investment in the industry and risks undermining Turkmenistan’s credibility as a reliable gas supplier.