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UKRAINIAN PRESIDENT CALLS ON POTENTIAL COALITION TO ADOPT COMMON DEVELOPMENT PLAN. President Viktor Yushchenko called in his weekly radio address on April 8 on the participants in a possible parliamentary coalition to work out a single program for developing the country, Interfax-Ukraine reported. "The country cannot have two or three development programs," Yushchenko said. "It is necessary for a governing coalition to work out a joint, single program based on the "Ten Steps Toward the People" [Yushchenko's election manifesto] and [this year's] presidential message to the Verkhovna Rada," Yushchenko added. JM
UKRAINIAN OPPOSITION PARTY PROTESTS VOTE COUNT. A group of representatives of the Natalya Vitrenko Bloc spent the night of April 9-10 in the offices of the Central Election Commission (TsVK), protesting the way the TsVK is counting the votes in the March 26 parliamentary elections, the "Ukrayinska pravda" website (http://www.pravda.com.ua) reported on April 10. Natalya Vitrenko, leader of the Progressive Socialist Party, believes that the TsVK miscalculated the percentage of ballots cast for her bloc. The TsVK preliminarily announced on March 30 that the Natalya Vitrenko Bloc failed to overcome the 3 percent threshold needed for parliamentary representation. Vitrenko believes that in determining the relevant percentage the votes cast for her bloc should be divided by the votes cast for all other parties taken together, without taking into account invalid ballots or ballots in which voters chose "against all." Vitrenko claims that if the votes are counted in this way, her bloc will gain representation in the Verkhovna Rada with 3.09 percent of the vote. The TsVK is expected to release final results of the March 26 election in the afternoon of April 10. JM
Turkmen President Saparmurat Niyazov has grown increasingly unhappy with his country's role as a natural-gas reservoir feeding Russia's ambition to reinvent itself as a 21st-century energy superpower. After a number of high-profile moves in recent months to raise the price of Turkmen natural gas for Russia, Ukraine, and Iran, Niyazov has now signed a deal with China to build an export pipeline to the east that would break Russia's virtual monopoly on export routes for Turkmen gas. But some experts have cast doubt on the feasibility of that project.
Niyazov arrived in China on April 2, and the framework agreement on the pipeline was inked the next day. The text of the pipeline agreement as published by the official Turkmen news agency TDH states that China will buy 30 billion cubic meters (bcm) of Turkmen gas annually for 30 years, starting in 2009. Who will actually build the pipeline and over what time period is to be worked out by December 31, 2006. Nor did official reports divulge any financial details, but the Russian daily "Kommersant" reported on April 3 that Niyazov would try to convince the Chinese side to finance the project.
A Turkmen television report on April 8 suggested the pipeline might be completed earlier than 2009 and provided additional information about the pipeline route. "In the first phase [of the project], we plan, starting from 2008, to deliver some 30 bcm of Turkmen gas [annually] via Uzbekistan and Kazakhstan, to Urumci [western China] and beyond it, to Shanghai [eastern China], and to increase these volumes to up to 50 bcm by 2010," the station reported.
Outside observers reacted skeptically to the deal, raising doubts about both Turkmenistan's ability to meet additional export commitments and the project's overall feasibility. In an interview with the Turkmen opposition website gundogar.org, Dr. Roland Goetz, an energy expert at Germany's Institute for International and Security Affairs, noted that no one really knows how much gas Turkmenistan possesses. Official statistics put Turkmenistan's total production in 2005 at 63 bcm, with exports amounting to 45 bcm. Estimating Turkmenistan's maximum export potential at 100-120 bcm/year and noting that the pipeline to China would have to traverse 4,000 kilometers, Goetz concluded, "I doubt the economic feasibility of this entire idea." He added, however, that for China, political and military factors might outweigh economic considerations. Goetz also noted that since the new pipeline would give Turkmenistan a measure of independence from Russia, "Ashgabat will do everything possible to bring the project to completion."
Others views of Turkmenistan's production potential are even more pessimistic. In an article in "The Washington Post" on April 6, Nadejda M. Victor, a research fellow at the Program on Energy and Sustainable Development at Stanford University, wrote that "Turkmen gas production is poised to decline and Turkmenistan's gas industry is barely functional because the country's political environment is scary for long-term investors."
True, China is serious about its desire to ensure energy shipments from the West. It recently spent more than $4 billion to acquire an oil company with production assets in Kazakhstan and has reached an agreement with Russia to build a natural-gas pipeline from Siberia. But doubts about the Turkmen project are well-founded, and an alternative Turkmen export pipeline -- across Afghanistan -- remains at the drawing-board stage. But the framework agreement signed in Beijing is still a serious indicator of Turkmenistan's intentions, the outlines of future geopolitical jostling for primacy in the Eurasian energy sphere, and problems on the horizon for Russia.
One obvious message the Turkmen-Chinese framework agreement sends is that Turkmenistan will continue its push for higher prices in its negotiations with current customers (Russia, Ukraine, and Iran). The agreement does not specify a price for the Chinese gas purchases that are to begin in 2009, but it states that the price "will be set on a reasonable and just basis, based on a comparable price on the international market," and paid "exclusively in U.S. dollars." President Niyazov said in February that Turkmenistan intends to raise the export price of its natural gas from $65 to $100 per 1,000 cubic meters in the fall. The framework agreement suggests that Russia and Ukraine should take note.
The agreement further suggests that the first serious clash between Russian and Chinese interests in Central Asia will occur in the energy sphere. Russia's Gazprom is set to become increasingly dependent on Central Asian imports to maintain the company's sagging gas balance and can be expected to exert political leverage to defend its interests in that region. If China makes a serious push to gain access to Central Asian gas -- replete with investments in a pipeline that links Turkmenistan, Uzbekistan, and Kazakhstan -- it could set the stage for Central Asian competition between Beijing and the Kremlin.
Finally, the emerging competition for access to energy resources in Central Asia poses a further problem for Gazprom, whose short-term strategy envisages a major increase in purchases of Central Asian gas. Vladimir Milov, from the Institute for Energy Policy, explained in a briefing at the Carnegie Endowment in Washington, D.C., on March 16 that Gazprom will have no means of offsetting declining domestic gas production beginning in 2008, and by 2010 will be purchasing 100 bcm of gas annually from Central Asia. Gazprom is counting on Turkmenistan to provide the bulk of that gas, with purchases slated to go to 70-80 bcm a year as early as 2007-08.
Gazprom's future plans assume that Turkmenistan will sell virtually all of its export production to Russia. But the draft agreement between China and Turkmenistan implies that if the new pipeline becomes a reality, Ashgabat could give priority to meeting its commitments to China. The text states that the gas for export to China will come from fields on the right bank of the Amu-Darya River, but it adds, "If additional volumes of gas are required to build the Turkmenistan-China gas pipeline, the Turkmen side can guarantee gas shipments from other gas fields."
Both Milov and Victor warn that Russia, a key supplier of gas to Europe, could face a supply crunch in the not-so-distant future. Goetz stresses that Turkmenistan's negotiations with China point in precisely this direction: "For now, Ashgabat is, so to speak, loyal to Moscow, but if President Niyazov suddenly changes his mind, this could have implications for the entire energy situation, including the situation in Europe."