#10
Financial Times (UK)
22 January 2002
Putin seeks Eurasian alliance of gas producers
By Robert Cottrell in Moscow
President Vladimir Putin called on Monday for a "Eurasian alliance of gas producers" uniting Russia and the three big gas-producing countries of central Asia.
Such an alliance would help guarantee Russia close, long-term economic ties with key countries in central Asia, at a time when many Russians are worried by growing US influence in the region.
Mr Putin made the call in a meeting with Saparmurat Niyazov, the autocratic president of Turkmenistan, a gas-producing former Soviet republic which borders Afghanistan.
The gas alliance envisioned by Mr Putin would bring together Russia, Turkmenistan, Kazakhstan and Uzbekistan. It would "bring an element of stability into the transportation of gas on a long-term basis", Mr Putin said.
For the past decade the central Asian countries have been wondering how best to diversify their export routes and export markets away from the old Soviet pipeline system running into and across Russia. They are looking to China, Turkey, Iran and through Afghanistan to Pakistan. But in practice, most alternative routes have posed big financial or political obstacles.
Mr Putin evidently hopes he can put relations on a new footing by persuading central Asian leaders that staying close to Russia makes the best commercial sense. They would continue to rely on Russia's big and still growing network of pipelines to move their gas into European markets.
But for the plan to go any further, Russia will have to persuade the central Asian countries they will be treated fairly by Gazprom, the Russian gas monopoly that controls the pipelines and also covets export markets for itself.
Russia is the biggest gas producer in the region, accounting for 585bn cubic metres a year. Uzbekistan produces 50bn, Turkmenistan 45bn and Kazakhstan 10bn. But the central Asian countries have plans to increase production and exports, in some cases dramatically, raising the prospect of future price wars in foreign markets from which all would suffer.
Any attempt by Mr Putin to strengthen ties with central Asia will please Russian conservatives worried by the growing US presence. Gennady Seleznyov, the speaker of the Russian parliament, and Konstantin Totsky, the head of the Russian border guards, have both said recently that western forces would not be needed in central Asia once the fighting in Afghanistan was over.
Of all the central Asian counties, Turkmenistan has been the most cautious in co-operating with the US-led Afghan war effort. It has allowed humanitarian cargoes to use its roads and air space. But it has refused to lend or accommodate military bases, insisting on its "neutrality".
Mr Niyazov may be hoping this policy will bring him rewards from Russia. But there were no signs on Monday that he had gained ground on another priority for Russia and Turkmenistan - the need for agreement on dividing the Caspian Sea and its mineral resources among the five countries surrounding it.
Mr Niyazov wants a Caspian summit at which the leaders of the five countries would themselves try to hammer out a solution. Russia does not want a summit until a solution has already been agreed by diplomats, and can be rubber-stamped.
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