Michael Lelyveld
Turkmenistan: China Plans To Aid Const. Of Iranian Pipeline
Fri Oct 19 01:58:38 2001



Turkmenistan: China Plans To Aid Construction Of Iranian Pipeline
http://www.rferl.org/nca/features/1997/11/F.RU.971117130313.html

By Michael Lelyveld

Washington, 17 November 1997 (RFE/RL) -- As Turkmenistan tries to break out of its economic isolation, China is emerging
as a key player that could help to pry open the republic's export routes.

Earlier this month at a meeting in Houston, in the western American state of Texas, Turkmenistan's oil and gas minister, Bartyr
Sardjaev, praised China for its plans to help build a Central Asian oil pipeline through Iran.

The new pipeline would carry oil from Kazakhstan and Turkmenistan to the Persian Gulf, allowing tankers to supply China with
oil to meet its vast energy needs.

In September, China announced it would invest $9.5 billion in a series of energy plans involving Kazakhstan, including a
250-kilometer oil pipeline through Turkmenistan to Iran for shipment to the Gulf.

China's long-range plans suggest that it will move to open the Iran route sooner rather than later. Beijing has already agreed to
build a 3,000-kilometer pipeline from Kazakhstan's oilfields to western China by the year 2005.

But in the meantime, China's demand for oil will continue to grow. The government predicts that the country's oil imports will
double in the next two years.

As a result, a Chinese route from Central Asia through Iran may become a matter of necessity rather than one of choice. In
Washington, the argument about the need for Iranian transit routes is becoming a familiar one.

Over the past year, Turkmenistan has tried repeatedly to make the case that trans-Iran pipelines are a matter of survival for the
republic. Russia has virtually blocked Turkmenistan's export avenues for gas sales to Europe through former Soviet pipelines.

U.S. oil companies which have invested in Caspian oil projects with Azerbaijan are also lobbying behind the scenes for an
Iranian export option, while they continue to pursue western routes to the Mediterranean publicly.

Kazakhstan is also expected to press the case for Iranian access during the visit of President Nursultan Nazarbaev to the
United States this week.

But the addition of China could be a significant new factor as Washington weighs its policy toward Iranian pipelines. Within the
past month, U.S. President Bill Clinton's administration has stressed the importance of meeting China's energy needs in making
its own case for allowing U.S. exports of nuclear power equipment to Beijing.

Having just made the argument that China's energy demands should justify U.S. sales, it may be hard to turn around and take
the opposite position, simply because the planned pipelines would run through Iran.

China is also adding its weight to a growing list of countries that are advocating Iranian routes. In addition to Turkmenistan,
Turkey has argued that it needs a pipeline across Iran for its gas supplies.

If the British-Dutch firm Royal/Dutch Shell decides to undertake the project, as expected, two more U.S. allies would join the
chorus of those urging export routes over Iraniansoil. Washington has shifted back and forth on the issue for the past four
months. It first indicated in July that it would not oppose a gas pipeline from Turkmenistan to Turkey because it would
represent a deal between two friendly nations, even though it would cross Iran.

But trouble surfaced in September after Iran announced it had signed a $2 billion gas development deal with companies from
France, Russia and Malaysia. The contract drew the wrath of the U.S. Congress, prompting sanctions threats against both the
gas project and the pipeline.

Since then, the U.S. Administration has found it hard to draw a distinction between pipelines crossing Iran that would help other
nations and projects that primarily benefit Tehran.

In recent days, the U.S. has appeared to take a tougher line against any cooperation with Iran. During the meeting in Houston,
U.S. officials reportedly voiced concern that Turkmenistan had withdrawn three Caspian oilfields from an international tender
because of concerns about a potential border dispute with Iran.

Last week during a visit to Ashgabat by U.S. Energy Secretary Federico Pena, Turkmenistan President Saparmurat Niyazov
said that he now favors a gas pipeline to Turkey that would run under the Caspian through Azerbaijan rather than through Iran.

The change may have been a response to U.S. pressure. But such a route seems unlikely as long as there are legal disputes
about dividing the Caspian and differences about oilfield ownership between Turkmenistan and Azerbaijan.

The U.S. may also be working to discourage China from using an Iranian pipeline, although it is less likely to have success with
Beijing.

Turkmenistan's best course may be to declare its own strategic interests in dealing with Iran, at least until Washington can
prevail upon Russia to reopen the republic's only alternative export routes.

17-11-97