Russia against Turkmenistan as Ashgabat Intensifies Energy Cooperation with Tbilisi

Gazprom, a Russian state-owned energy company, has filed a lawsuit against Turkmenistan’s Turkmengaz at an international arbitration court in Stockholm. On July 24th a spokesman for Gazprom stated the lawsuit had been filed with a demand to revise their energy prices.

The move by Gazprom comes two weeks after Turkmenistan accused the company of not paying for the gas supplied by the Central Asian country since the beginning of 2015. Turkmengaz also accused the Russian company of being an “unstable partner” in February.

Gazprom purchases the natural gas from Turkmenistan for personal use and resale for about $240 per 1000 cubic metres, according to the Russian edition of Forbes magazine. However the volume of gas has dramatically fallen in the last several years.

In 2008 Gazprom bought more than 40bcm of the fuel but between 2009-2014 Russia’s annual gas import from Turkmenistan had fallen to around 10-11 bcm. At the end of 2014 Gazprom announced it would be further limiting its purchases of Turkmen natural gas to 4bcm for 2015.

Moscow plans to begin selling gas to China in 2018, gradually increasing the flow to 38bcm per year from East Siberia. Turkmenistan on the other hand aims to diversify its energy routes and supply the EU, who is trying to reduce its energy dependency on Russia. The Union aims to begin exporting Turkmen gas by 2019.

However, while Turkmenistan owns the fourth-largest known reserve of natural gas, the county has limited infrastructure so cannot readily export its energy.

Negotiations centered on the Trans-Caspian Pipeline, which will deliver Turkmen gas to Europe, are ongoing between Turkmenistan, Turkey, Azerbaijan and the EU. In May Ashgabat extended an invitation to Georgia, which is an important transitory country. This would enable Turkmen gas to be transported from Azerbaijan to Turkey.

Kurbanguly Berdymukhamedov, President of Turkmenistan, spoke on energy matters with top Georgian Government officials on his first official visit to the country on July 2-3. 

Nino Japarashvili

27 July 2015 16:15