TURKMENISTAN - Iran-US Rivalry; Washington Insists On Trans-Caspian Corridor

In late April, 1998, Tehran warned Ashgabat against a US-Turkmen deal announced in Washington on April 23 for the two sides to study American-funded plans for a gas pipeline to be built to the West under the Caspian Sea, bypassing both Iran and Russia's pipeline system (see OMT 48). The deal was signed during President Niyazov's visit to Washington. In the previous week, the governments of Tehran and Ashgabat had signed an agreement on the proposed 30 BCM/year gas pipeline from Turkmenistan to Turkey and Europe to pass via Iran, to which the US has been opposed. Washington continues its efforts to isolate the Tehran regime.

On April 27, Iranian Foreign Minister Kamal Kharazi told a press conference the US-Turkmen deal violated the rights of other Caspian states. He said Iran and Russia were opposed to the proposed seabed pipeline "because of environmental considerations". Kharazi criticised Washington's "inflexible" stand, saying it would hinder the region's development. "America is showing no flexibility with regard to the pipelines and continues to prevent them from passing through our territory. This will have a negative impact on the region's development". In the previous week, Kharazi said: "The Caspian Sea belongs to all the littoral states and its legal regime should be decided by all the states bordering the sea".

US Vice President Al Gore, one of the proponents of the Trans-Caspian "energy corridor", said as he signed the deal with President Niyazov: "This (undersea) pipeline...will help develop an energy corridor to diversify world energy sources and, most importantly, bolster hope for a new security and prosperity and independence in Central Asia". It was agreed that a $750,000 US grant will fund the feasibility study for the pipeline, estimated to cost $2.8 billion, which will examine construction, gas production, sales issues, and environmental impact.

One of the plans under US consideration would rehabilitate existing gas pipelines in Turkmenistan, Uzbekistan and Kazakhstan. Then these would be linked to the proposed new pipeline under the Caspian Sea which would run through Azerbaijan, Georgia and Turkey.

Niyazov stressed that the contracts he signed in Washington - including E&P deals with Mobil and other oil companies - benefitted "everyone in the area". He added: "The agreements that we signed do not impede in any way the interests of the Commonwealth of Independent States" (CIS). The US-funded study is to be completed by October 1998. US export opportunities for the proposed pipeline could reach $600m, according to the White House.

A report by the London-based IISS think tank says recoverable oil reserves in the Caspian Sea total about 25-30 billion barrels. That is considerably smaller than the US estimate of about 200 billion barrels.