Turkmenistan: President Orders Start to Work on TAPI Pipeline

Turkmenistan has fired the starting pistol on the ambitious TAPI natural gas pipeline, a 1,735-kilometer route intended to supply markets in Afghanistan, Pakistan and India.

To the applause of ministers, President Gurbanguly Berdymukhamedov announced he had ordered the beginning to construction on November 6 during the weekly Cabinet meeting. 

The work on the Turkmen section will be done by state-run gas company Turkmengaz, which was named project consortium leader for TAPI Pipeline Company Limited in August, and energy infrastructure construction division Turkmenneftegazstroi.

The pipeline is designed to transport 33 billion cubic meters of gas annually for a period of three decades. Work is formally due to start in December, according to the government decree signed by Berdymukhamedov, but substantial construction is not expected to get underway until next year. The completion date has been set for December 2018. 

Turkmenistan currently exports gas to China, Russia and Iran. But relations between Turkmenistan and Russia, which this year reduced the volume of its gas purchases to 4 billion cubic meters, took a turn for the worse after Ashgabat in July accused Russia's Gazprom of failing to pay for fuel supplied this year.

It was not all good news on the energy front at the Cabinet meeting though.

The long-serving minister for oil and gas, Baymurad Khodjamukhamedov, asked Berdymukhamedov if he could step down for reasons of ill-health, in effect a resignation, which was promptly accepted by the president.

Khodjamukhamedov, who had occupied his post since 2009, will be replaced by Yagshigeldy Kakayev, who is now the head of the presidential State Agency for the Management and Use of Hydrocarbon Resources. Kakayev will continue to perform his current job on top of taking on ministerial duties.

Kakayev has already served in the ministerial position, from May 2012 to June 2013, when he worked in tandem with Khodjamukhamedov.

It is not immediately evident whether Khodjamukhamedov’s illness was a diplomatic one, but his resignation followed shortly on the heels of news that German company DEA Deutsche Erdoel AG is set to relinquish its natural gas concession on Turkmenistan’s Caspian Sea shelf. Foreign-based website Alternative News of Turkmenistan reported last month that the Hamburg-based oil and gas company intended to end its exploration commitments at what is known as Block 23 over frustration at excess bureaucracy and corruption.

Indeed, a state news agency report on the Cabinet meeting indicates that graft did come up.

“The leader of the nation once again warned all heads of ministries and agencies that he will in accordance with the law strictly prevent all forms of bribery, corruption and false reporting, and that nobody would be forgiven,” the report said.

On this occasion, those remarks appear to have been directed at the head of the statistics agency, Akmyrat Mammedov, who received a rebuke for filing inaccurate data. Reference to Mammedov’s rebuke followed a passage about the woeful state of the agricultural sector in the Lebap Province, where several local leaders could soon be receiving summons from the prosecutor’s office.

Much further up in the report, however, Mammedov is cited as giving an extremely rosy picture for the state of the economy at large. That information provided by Mammedov is presumably not suspect.

Industrial output is reportedly on the rise across the board, from oil to gas, metals to plastic, and cotton to foodstuffs.

Economic growth for the January-October period has reached 7.5 percent, and that is despite the plummeting global prices for Turkmenistan’s hydrocarbon exports.

Only slight hints reveal any anxiety that cash might be a little short.

Speaking to the chairman of the Central Bank, Merdan Annadurdyev, the president stressed the need to boost exports of the Made in Turkmenistan brand to ensure the inflow of foreign reserves. Fleeting references made to “measures to maintain the stability of the national currency” indicate that Turkmenistan is also having trouble coping with maintaining its exchange rate, which has officially and on paper remained stable, unlike in neighboring Kazakhstan.

This article first appeared on EurasiaNet.org, a Natural Gas Europe Media Partner