Turkmenistan: The new Great Game

Europe, Russia and China battle for access to Turkmenistan's energy resources.

Miriam ElderNovember 28, 2009 09:00Updated May 30, 2010 12:14

A refinery on the outskirts of Turkmenbashi, Turkmenistan. (Miriam Elder/GlobalPost)

[GlobalPost Moscow correspondent Miriam Elder recently traveled to Turkmenistan where she reported on the battle for the country's national gas resources, below, as well as its new leader and its threatened stability.]

TURKMENBASHI, Turkmenistan — On the outskirts of this impoverished town on Turkmenistan’s Caspian Sea coast an endless mess of lights sparkle, towered over by three flames that burn around the clock — a colorful image of the natural gas that is this country’s lifeblood.

In the world’s endless hunt for energy, Turkmenistan is vital. Sitting on massive gas reserves both on land and in its Caspian waters, the country ranks among the world’s largest gas holders in terms of reserves, according to international experts, alongside the likes of Russia, Iran and Qatar.

For now, Europe and Russia remain locked in a struggle to win access to Turkmenistan’s resources. This is the heart of the new Great Game.

“One can argue that there's a window for others to come in,” said Tim Gould, Caspian expert at the Paris-based International Energy Agency. “Given the time to put new projects together the timing would be about right to meet anticipated gas demand growth towards 2015 and after."

Europe is keen to diversify energy sources and routes to reduce its dependence on Russia following three consecutive years of pricing spats with Ukraine that prompted Moscow to shut the taps, leaving Europe shivering at the height of winter. Europe imports about 25 percent of its gas supply from Russia, and 80 percent of it arrives in pipelines that run across Ukraine.

A photo of Turkmenistan President Gurbanguly Berdymukhamedov hangs on a hotel, seen through rusting ship hulls, in the Caspian port city of Turkmenbashi.
(Miriam Elder/GlobalPost)

Russia, meanwhile, is eager to maintain its near monopoly on central Asian supplies. Despite its standing as the world’s largest gas producer, the country needs to import gas from central Asia to boost its own reserves as demand at home and abroad grows, and investment in new and difficult Arctic and East Siberian fields lags.

But will there be enough gas for everyone?

International organizations, independent auditors and the Turkmen government disagree on how much gas the country actually holds.

According to the BP Statistical Review, the country holds the world’s fourth largest gas reserves, at 7.94 trillion cubic meters, or over 4 percent of the world’s reserves. Cedigaz, an international gas organization, puts the amount at 2.7 tcm.

Last year, an independent U.K. auditing firm, Gaffney, Cline & Associates, carried out an audit of the country’s major South Yolotan-Osman field in western Turkmenistan, one year after it was discovered.

Last month, reports emerged that the audit had overstated the contents of the field by two to three times, because of reliance on statistics provided by Turkmen officials. In the wake of the ensuing scandal, President Gurbanguly Berdymukhamedov fired the country’s energy team, from its energy minister to the head of all state-run energy companies.

Yet all agree that the stakes are huge, judging at least by the gas-rich neighborhood in which Turkmenistan finds itself.