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Cablegate: Embassy of Turkmenistan Reiterates: "We Only Sell

VZCZCXRO3224
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #5701 3381514
ZNR UUUUU ZZH
P 041514Z DEC 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5672
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS MOSCOW 005701

SIPDIS

SIPDIS
SENSITIVE

DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR HARBERT, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER

E.O. 12958: N/A
TAGS: EPET ENRG ECON PREL RS TX
SUBJECT: EMBASSY OF TURKMENISTAN REITERATES: "WE ONLY SELL
GAS AT THE BORDER"

REF: A. ASHGABAT 1297
B. MOSCOW 5563
C. ASHGABAT 1283

-------
SUMMARY
-------

1. (SBU) Embassy of Turkmenistan Econ Counselor Murat
Yazberdiyev reiterated to us November 30th that Turkmenistan
is only interested in selling gas "at the border." That
said, Turkmenistan had no objections to others either
improving existing pipelines or building new ones through
which to export Turkmen gas. He was confident Turkmenistan
would have the gas to fill its commitments. End summary.

---------------------------------------
"TOO COMPLICATED TO SELL BEYOND BORDER"
---------------------------------------

2. (SBU) In a November 30th meeting at the Embassy of
Turkmenistan, Econ Counselor Murat Yazberdiyev said his
country is "not interested in investing in pipelines and
projects outside its borders." He said "it is too
complicated to sell beyond the border," citing
intergovernmental agreements, legal issues, and contract
negotiations as examples of potential difficulties. On the
agreement to increase gas prices to Russia (refs A and B), he
added that there was also an "oral agreement" to increase
volumes, but he did not elaborate.

-------------------------------
BUT PROLIFERATING EXPORT ROUTES
-------------------------------

3. (SBU) Yazberdiyev said the recent announcement related to
construction of a new gas pipeline along the Caspian to
Russia (ref A) was "just a declaration" of a project on which
both sides had previously agreed; "no new documents were
signed." However, the new pipeline would add another 30 bcm
of export capacity north, and its construction was expected
to begin in the second half of 2008. He added that
Turkmenistan and Gazprom are also upgrading the existing
pipeline to Russia, increasing its capacity from 40-45 bcm to
80 bcm.

4. (SBU) Yazberdiyev said the expected 30 bcm pipeline east
that China plans to build should be completed by the end of
2009, with Kazakhstan and Uzbekistan contributing volumes.
He also volunteered that Turkmenistan and Iran are working
together to increase from 8 bcm to 14 bcm the volume of gas
sales via pipeline to Iran. Finally he called the
Trans-Caspian pipelines, Nabucco and South Stream "just
pieces of paper" for now.

--------------------
IS THERE ENOUGH GAS?
--------------------

5. (SBU) Yazberdiyev was not concerned about Turkmenistan's
ability to produce the needed gas, explaining that
Turkmenistan produced 93 bcm at its peak during Soviet times,
that internal consumption is just 10 bcm, and that the
country is optimistic about its untapped potential.

-------
COMMENT
-------

6. (SBU) For Turkmenistan to become more interested in
sending gas west, it would likely need to boost production.
It would also have to contend with Russian opposition.
However, Russia's grip on Turkmen gas will weaken as other
routes come on line or are upgraded. End comment.
BURNS

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