Türkiye’s Turkmenistan gas quest through geopolitical gridlock

I generally view with skepticism the memorandums of understanding signed between countries. Often, they possess a seriousness just slightly beyond mere intent declarations: they do not bind the parties, are laden with political messages, and frequently signify little more than “we had a written outcome from our discussions.” Especially during presidential-level visits, if you look at the joint communiqués, numerous memorandums of understanding are hastily penned and signed.

How many of these are real, responsive to actual needs, and implemented or monitored for follow-through? This often does not matter, as the next visit leads to another dozen memorandums being signed.

Recall the announcement of a “$50.7 billion deal signed between Turkey and the United Arab Emirates (UAE).” Subsequently, news emerged about “Turks being granted a lion’s share from more than 5,200 projects worth a total of $819 billion in Saudi Arabia,” alongside billions of dollars being invested in Turkey. But is there any such development?

Efforts to bring Turkmenistan natural gas to Turkey

Similarly, I have lost count of the dozens of natural gas memorandums of understanding with Turkmenistan and Azerbaijan.

Agreements are signed, political statements are made, not only between states but also between private companies, SOCAR and Türkmengas. The result: While there is already natural gas flowing from Azerbaijan through TANAP and the Erzurum pipeline, a single molecule of natural gas is yet to come from Turkmenistan.

Efforts to bring Turkmenistan’s natural gas to Turkey predate the December 1997 Gazprom-led and promptly operationalized Blue Stream project. The Russians, strong in both the European and Turkish markets, didn’t want cheaper, competitive Turkmen gas to arrive, so they thwarted a series of initiatives in partnership with Iran.

During my tenure at British Gas (BG Group), later acquired by Shell, I paved the way to Asghabat. We wanted to operate the South Yalotan and Galkynysh gas fields and presented a very attractive proposal to Turkmen leaders, aiming to extend production through pipelines reaching Turkey and onward to European markets. We were also ready to finance it.

Russian and Iranian hurdles on Caspian Sea transit

Yet, the Turkmen authorities did not lean towards the production-sharing agreement we deemed crucial, nor did we overcome Russian and Iranian hurdles regarding the Caspian Sea transit. Asgabat was content to stay within its borders.

At that time, Azerbaijan, not eager to lose its markets in Turkey and Southeast Europe, was lukewarm towards the passage of Turkmen gas through the Caspian and using Azerbaijan and Georgia transit routes to reach Turkey.

There were also border disputes and contested areas in the Caspian between Baku and Asgabat. Azerbaijan’s Kepez field, referred to by Turkmenistan as Serdar, is the most famous. These have yet to be fully resolved to satisfy both parties. I understand President Erdoğan was mediating the amicable resolution of disputes between Ilham Aliyev and Serdar Berdimuhamedov.

Of course, Turkmenistan, sitting on the world’s fourth-largest natural gas reserves with no access to seas, is striving to diversify its sales routes to global markets. Currently, it can sell pipeline gas to Russia, Iran, and China. If it ever happens, it also wants to sell through the TAPI pipeline to Afghanistan, Pakistan, and India. However, due to current geopolitical conditions and the more practical, cost-effective options provided by renewable energy, I believe this project is doomed to remain a “pipedream.”

Therefore, it would be much preferable for Turkmenistan to send additional gas to Turkey (and from there to much-needed EU markets) via Azerbaijan-Georgia or Iran.

Turkey-Azerbaijan Cooperation Agreement

I won’t even mention other rich reserves; just in the Galkynysh field alone, Berdymukhamedov disclosed reserves of 27 trillion cubic meters of gas at the last Antalya Diplomacy Forum. You can compare this with the 540 billion cubic meters of gas reserves we reportedly found in the Black Sea.

According to international records, Turkmenistan has approximately 13.6 trillion cubic meters of proven gas reserves and produces 80 billion cubic meters of gas. Of this, it consumes 36.7 billion cubic meters domestically, exports 31.5 billion cubic meters to China, and 10.5 billion cubic meters to Russia. Occasionally, it also sends 10 billion cubic meters to Iran.

During the signing ceremony of the Turkey-Azerbaijan Cooperation Agreement in the Natural Gas Field held in Istanbul, with the participation of Energy and Natural Resources Minister Alparslan Bayraktar and Azerbaijan’s Economy Minister Mikayıl Cabbarov, I wondered if signining another memorandum of understanding would meet the same fate as the previous dozens of texts. I hope not; my wish is it has a robust framework and is not sabotaged once again by Russia and Iran in the later stages, as has often been the case.

Looking at the contents, I believe the most important aspect of this memorandum is the declaration that “we are reaching an agreement with this memorandum for Turkmenistan’s natural gas to reach Turkey via Azerbaijan and Georgia.” Fine but why did Turkmenistan and Georgia’s energy or economic ministers not attend Istanbul and sign the agreement? Because without their commitment, the agreement has no practical value; it merely adds to decades of repeated intent declarations.

Bayraktar emphasized that the strong will demonstrated by President Erdoğan and Aliyev is the most tangible evidence and guarantee of bilateral cooperation at the strategic partnership level, which was elevated to a strategic alliance with the Shusha Declaration signed on June 15, 2021.

Herein lies no issue.

Turkmenistan gas: Overcoming geopolitical rivalries

We know that the two countries successfully developed the Baku-Tbilisi-Ceyhan Crude Oil Pipeline, the Baku-Tbilisi-Erzurum Natural Gas Pipeline, and the Trans-Anatolian Natural Gas Pipeline (TANAP) in partnership. All three are operational based on mutual interests. As a result, SOCAR is the largest direct foreign investor in Turkey.

Included in this agreement is the transportation of additional gas volumes from Azerbaijan and Caspian resources to Turkey by 2030, with a portion of the gas reaching Europe via Turkey. Minister Cabbarov indicated they also discussed increasing the capacity of TANAP and South Caucasus natural gas pipelines for 2030 and beyond. This is significant for both Turkey and the EU in terms of gas supply security, moving out of Russia’s supply radar. It is understood that there will be joint efforts to expand connection capacities both in Bulgaria and Greece.

Moreover, the Igdir-Nakhchivan Natural Gas Pipeline, which will deliver natural gas to the Nakhchivan Autonomous Republic of Azerbaijan, arrived as a new “sibling” and is targeted for completion by the end of this year.

In essence, Turkmenistan’s natural gas is critically important on a global scale to Russia, China, South Asia, and Europe. However, it first needs to facilitate investors to produce this gas, create sufficient export capacity, and then reach world markets, which requires overcoming decades-old geopolitical rivalries.

If the recent agreement will pave the way for concrete steps towards these objectives, incorporating not only Baku but also Asgabat, Moscow, Tehran, and Tbilisi into the existing complex equation, and if it can break the resistance of fossil fuel opposition lobbies fervently committed to the 2050 decarbonization goal, then that’s wonderful, and we should all rejoice. This would not only create an alternative to Russian and Iranian gas but also bring us closer to our goal of becoming a regional gas hub, so we should wholeheartedly support it, if there is meat on the bone.