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By Gunay Hasanova

Following the recent working visit of Turkmen President Gurbanguly Berdimuhamedov to Russia, the revolved relations between Russia and Turkmenistan due to disagreements over price negotiations to gas exports seems moving to a more positive phase.

Russia has always been and will be a strategic partner of Turkmenistan, said Turkmen President Gurbanguly Berdimuhamedov, who is on a working visit to Russia.

President Berdimuhamedov made the remarks at a meeting with his Russian counterpart Vladimir Putin on November 1 in Moscow.

Moreover, the two presidents discussed the key topics of bilateral cooperation and also exchanged views on relevant regional issues.

In addition, Turkmen President Gurbanguly Berdimuhamedov further invited his Russian counterpart to participate in the global sustainable transport conference to be held in Turkmenistan under the auspices of the UN on November 26-27.

"Russia and Turkmenistan have great potential,” the Turkmen president added. “The idea of creating the economic forum or a logistics center was voiced at the recent meeting in Astrakhan. Russia attaches great importance to the development of transport and transit corridors.”

"Of course, Russia’s presence at the conference will give even greater impetus to the development of transport and transit corridors not only for Central Asia but also in the south-east direction," President Berdimuhamedov said.

In turn, highlighting the Turkmen President's role in the development of bilateral relations, Putin stressed that the relations between Moscow and Ashgabat will continue developing.

Turkmenistan and Russia have more than 100 agreements, covering all areas of cooperation. The main document between them is the agreement on friendship and cooperation dated April 23, 2002.

Russia holds leading positions among the biggest foreign trade partners of Turkmenistan.

Russian companies fruitfully operate on Turkmen market, especially, in the supply of vehicles and equipment, telecommunications, oil and gas fields. Around 190 companies with Russian share operate in Turkmenistan.

However, the chill in the relations between the countries happened when the Russian company suspended purchases of Turkmen gas entirely at the start of 2016. That came after Gazprom had reduced the amount of Turkmen gas it bought from more than 40 billion cubic meters [bcm] in 2008 to some 3.1 bcm in 2015.

Gazprom announced on January 4, 2016, that, rather than purchasing Turkmen gas, the company would instead buy 3.1 bcm of gas from Turkmenistan's neighbor, Uzbekistan.

Taking into account the current economic situation in Turkmenistan, the visit of Turkmen President is a rational step in order to improve the relations, which is in the interests of both sides, mainly of Turkmenistan.

Turkmenistan, which has the fourth largest proven gas reserves in the world and produces about 70-80 billion cubic meters of gas a year, is actively implementing an energy strategy aimed at increasing exports of the blue fuel and diversifying its supply routes to the largest global markets, where the demand for energy resources is growing.

In 2015, Turkmenistan's natural gas exports amounted 48 bcm.

Experts consider that the biggest problem Turkmenistan faces from Russia stopping imports of Turkmen gas is that it leaves Turkmenistan with just the two customers – China and Iran.

Turkmenistan is exporting a large amount of gas, approximately 30 bcm, to China, the most important market where the demand for gas will only grow. For 10 years, the demand for gas in China increased by 4.5 times to 185.5 billion cubic meters in 2015.

However, the problem with sales to China is that some part of the gas Turkmenistan is exporting is counted as repaying multi-billion dollar Chinese loans to develop Turkmen gas fields and build the pipelines connecting Turkmenistan to China.

There is another export route passing via Iran. The Islamic State has huge gas reserves itself, which puts the country in the first place in the world.

It appears that soon Turkmenistan will only be exporting gas to China. That leaves Turkmenistan in a bad position to negotiate the price of its gas since China could simply refuse and then no one would be buying Turkmen gas.

However, according to many experts, in the light of lifting of sanctions on Iran, the country may soon begin development of new gas fields and change from a partner to a competitor of Turkmenistan. Hence, it is not the best idea to count on this route.

There is an alternative export route in the future - the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline started in December 2015, which will supply Turkmen gas to promising markets in South and Southeast Asia.

However, according to official statements, only the construction of this pipeline's Turkmen section will last for 3 years.

Experts consider that building plots in the transit countries, counting security problems in the region, may take even more time. Therefore, this export route can be beneficial for Turkmenistan only in the long-term.

Consequently, taking these challenges into account, at this stage, it is very beneficial for Turkmenistan to restore its relations with Russia and cooperate with it, especially in the energy sphere.

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Gunay Hasanova is AzerNews’ staff journalist, follow her on Twitter: @gunhasanova

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