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Cablegate: Turkmenistan Opens Second Gas Pipeline to Iran

VZCZCXRO3356
PP RUEHIK
DE RUEHAH #0035/01 0081119
ZNR UUUUU ZZH
P 081119Z JAN 10
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 4037
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 6097
RUEHBJ/AMEMBASSY BEIJING 3789
RUEHKO/AMEMBASSY TOKYO 3648
RUEHIT/AMCONSUL ISTANBUL 4339
RUCNDT/USMISSION USUN NEW YORK 1391
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 4273
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000035

SENSITIVE

SIPDIS

STATE FOR SCA/CEN; EEB; NEA/IR
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE/DSTARKS

E.O. 12958: N/A
TAGS: EPET PGOV EINV ETRD IR TU TX
SUBJECT: TURKMENISTAN OPENS SECOND GAS PIPELINE TO IRAN

REF: 09 ASHGABAT 886

ASHGABAT 00000035 001.2 OF 002


1. (U) Sensitive but unclassified. Not for public Internet.

2. (SBU) SUMMARY: On January 5 - 6, Iranian President
Ahmadinejad visited Turkmenistan to hold negotiations with
Turkmen President Berdimuhamedov and attend the opening
ceremony of the Dovletabat - Sarakhs - Khangiran gas pipeline,
the second gas pipeline linking Turkmen gas fields to Iran
(reftel). The two presidents had an official meeting on
January 5 during which a number of intergovernmental and
commercial documents were signed. On January 6, they traveled
to the Sarakhs district located in southeastern Turkmenistan
to inaugurate the gas pipeline. Turkish Minister of Energy
and Natural Resources Taner Yildiz also attended the pipeline
opening and met with the Turkmen and Iranian presidents. END
SUMMARY.

3. (SBU) During the visit, the Iranian and Turkmen
Governments signed the following intergovernmental documents:
a Memorandum of Understanding on Cooperation in the Area of
Cultural Heritage between the Turkmen Ministry of Culture and
Broadcasting and the Iranian Organization of Cultural
Heritage, Crafts, and Tourism; a Program of Cooperation
between the respective Ministries of Foreign Affairs; and an
Agreement on Conducting Unilateral Aerial Mapping.

4. (SBU) The Turkmen Ministry of Railway Transportation also
signed a $696 million contract with the Iranian Pars Energy
Company for construction of a 325 kilometer railroad line
between Bereket and Etrek. The construction will be financed
through a $324.8 million loan provided by Pars Energy and a
$371.2 million loan provided by the Islamic Development Bank
(IDB). The Turkmen Government also signed a loan agreement
with the IDB to that effect during the same meeting.

5. (SBU) Berdimuhamedov and Ahmadinejad went to Sarakhs on
the morning of January 6 to inaugurate the Dovletabat -
Sarakhs - Khangiran gas pipeline. The pipeline inauguration
was initially planned for the end of December 2009, but was
rescheduled for January 6 due to undisclosed reasons. (NOTE:
Media reports speculated the postponement was due to recent
protests in Iran. END NOTE.) The new pipeline is 1020
millimeters in diameter and 60 km long with the capacity to
transport 12.5 billion cubic meters (bcm) of natural gas
annually. This pipeline is the second gas pipeline from
Turkmenistan to Iran. The Korpeje - Kurtkui gas pipeline
located in western Turkmenistan was built in 1997 and also has
a 12.5 bcm capacity.

6. (SBU) According to a Turkmen - Iranian agreement signed in
July, 2009 (reftel), 14bcm is set as a benchmark volume with
the understanding that the volume can be increased with mutual
consent -- normal practice in gas agreements. Since July, both
Iran and Turkmenistan have been talking about volumes up to
20bcm in the next few years. However, according to
Turkmen energy experts, total gas exports to Iran are unlikely
to exceed 10 bcm in 2010 (three of which will be exported
through the new pipeline) since Iran is unlikely to sharply
increase gas consumption during the first year of expanded
supplies. In addition, export volumes could reach the target
14 bcm per year only after Iran constructs a 150-kilometer
internal extension of the new pipeline in order to transport
Turkmen gas to the Sangbast area of the Razavi Khorasan
province in eastern Iran. Iran plans to complete the 150
kilometer extension by the end of 2011. The two countries
have announced longer term plans to increase the volume of gas
exports up to 20 bcm.


ASHGABAT 00000035 002.2 OF 002


7. (SBU) On the evening of January 5, President
Berdimuhamedov also met with Turkish Minister of Energy and
Natural Resources Taner Yildiz, who was in Turkmenistan for
the opening of the pipeline. Local media sources reported
that the two officials emphasized the importance of the
Dovletabat - Sarakhs - Khangiran pipeline not only for
Turkmenistan and Iran, but also for other countries in the
region, including Turkey.

8. (SBU) COMMENT: The new pipeline is economically and
politically significant for Turkmenistan. It will not only
allow Turkmenistan to increase gas exports to the Iranian
market, but gas shipped to Iran could also continue westward.
In 2010, Turkmen gas will be exported to China, Iran, and
Russia, marking significant progress in the country's efforts
to diversify its export markets. END COMMENT.

CURRAN

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