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LIVE

Friday, 25 July, 2008, 16:00 GMT | more prices >>

Turkmens told to explore their options

By Upstream staff

The US Department of State's Eurasian diplomacy co-ordinator Steven Mann has urged Turkmenistan to find new routes, for its natural gas exports, adding that the Nabucco project skirting Russia a viable option for Central Asia's largest gas producer.

Turkmenistan exports most of its gas through Russian gas pipeline monopoly Gazprom, which resells it to Europe at higher prices. But the West wants it to diversify exports away from Russia, Turkmenistan's former Soviet overlord.

"We believe it is highly desirable for Turkmenistan to have alternative export possibilities, and Nabucco might be one of those," Mann said.

"Nabucco is progressing very well," he told Reuters on a visit to the Turkmen capital, Ashgabat.

Russian President Vladimir Putin this week called Nabucco, which will carry gas from the Caspian basin via Turkey and the Balkans to central Europe, a waste of money. He said it was losing out to the competing South Stream project, backed by Moscow.

South Stream, supported by Italy's Eni, aims to link Gazprom's Siberian gas fields to western Europe.

"There is a big difference between private sector pipelines and pipelines that are the subject of declarations," Mann said, commenting on Putin's statement.

"Serious international companies don't work on the basis of declarations."

Mann said Europe would prefer a pipeline not controlled by Gazprom.

"Right now Gazprom dominates imports from the East and many Europeans have told us that they would to like to see more competition, not less competition," he told the news agency.

Apart from Nabucco, Turkmenistan has expressed interest in a separate pipeline to Pakistan and India through Afghanistan - a project originally supported by Washington but suspended due to military conflict in Afghanistan.

"I have not seen any real commercial interest in the Afghan pipeline so far," Mann said.

Before joining Nabucco, Turkmenistan needs to increase its gas output, Mann said.

"Turkmenistan has not had an effective development of reserves during the period of independence," he said.

Turkmenistan has not revealed the results of an independent gas reserves audit made under former president Sapurmat Niyazov. Some analysts have questioned Turkmenistan's ability to supply gas into several pipelines.

President Gurbanguli Berdymukhamedov last year ordered a fresh audit which is yet to be carried out.

"President Berdymukhamedov is doing something extremely wise in terms of auditing the current gas reserves and the next important step for Turkmenistan is to bring in major international firms as investors," he said.

"I think the president has repeatedly underscored to me his desire to bring new, major investment into the Turkmen energy sector and it is going to be a continuing process."