Turkish President Recep Tayyip Erdogan is traveling to Turkmenistan for festivities December 12 marking the Central Asian state’s 30th anniversary of neutrality. While in Ashgabat, Erdogan will also hold talks with Turkmen leaders likely focusing on the topic of natural gas supplies.
Speaking to reporters earlier in December, Turkish Energy Minister Alparslan Bayraktar said Ankara is working to expand gas imports via a long-time arrangement with Iran, augmented by a swap deal with Turkmenistan. A lack of clarity about sanctions currently creates a major obstacle for Turkey.
The motivation for Turkey is a need for reliable and expanded gas supplies during the winter heating season. Without the Iranian imports, Turkey would likely have difficulty meeting its growing energy demands, and could suffer power cuts such as those which occurred most recently in the winter of 2022.
Turkey began purchasing 9.6 billion cubic meters (bcm) per year of Iranian gas starting in 2001. The purchase agreement is set to expire in July 2026.
Throughout the lifespan of the agreement, Turkey has experienced import disruptions, in part because of Iran’s difficulty in maintaining aging infrastructure due to sanctions. Interruptions also often occur during the peak mid-winter demand period, as Tehran diverts gas intended for export in order to ensure stable supplies for its domestic market.
The start in March of Turkey’s swap arrangement with Iran and Turkmenistan was seen as insurance that Turkey would meet its winter needs. The deal was also intended to help establish Ashgabat’s reputation as a reliable energy partner, thus providing a boost for efforts to revive a trans-Caspian gas pipeline project.
Turkey is a vocal advocate for building a trans-Caspian route, which has been on the drawing board since the 1990s. “We have reached the phase of taking concrete steps toward our 30-year dream of delivering natural gas to Türkiye through the Trans-Caspian Pipeline,” Bayraktar stated during a December 10 gathering of energy officials, held under the auspices of the Organization of Turkic States (OTS).
Under the swap agreement with Ashgabat, Turkey was to receive 1.3 bcm of Turkmen gas annually from Iran via an existing Iran-Turkey gas pipeline. In exchange Turkmenistan was to have delivered a slightly larger volume of gas via existing pipelines to northwestern Iran, with the difference in volume covering Iran’s costs for transiting gas to Turkey.
The deal had a smooth launch in March with Turkey receiving 112 million cubic metres (mcm) of Turkmen gas that month. It continued to go smoothly until June with Turkey receiving an overall total of 465 mcm of Turkmen gas.
Then, supplies suddenly stopped, even though Turkey’s state gas importer, Botas, made regular monthly capacity reservations for the Iran-Turkey pipeline to import Turkmen gas.
It remains uncertain why the unexpected halt occurred. Turkmengaz CEO Maksat Babayev has blamed “technical reasons,” while Bayraktar made vague references in October to payment issues.
The source of the problem, however, may well be linked to US and European Union sanctions policy. In June, the Trump administration ramped up sanctions against Iran to include barter trades for gas. The EU imposed similar sanctions in September.
The Turkish import deal that expires in July enjoys a sanctions waiver from Washington. That waiver is expected to remain in place, if the deal is renewed beyond 2026.
There may be problems with the Turkmen swap deal, however. The odds that Turkmenistan will receive a waiver for sending gas to Iran seem slim. Washington’s motivation for denying a waiver may be to exert pressure of Ashgabat to fully participate in the trans-Caspian pipeline project.
Since the start of the year, US policy towards Turkmenistan has sent mixed signals to Ashgabat. For example, the Turkmen leadership offered rare public praise in October for Washington’s support in launching a new phase of construction of a trans-Afghan pipeline, known as TAPI. But Turkmen officials have also been highly critical of Washington’s immigration restrictions imposed on Turkmen citizens.
Despite the lack of a functioning agreement and the uncertainty about sanctions, Bayraktar sounded a confident note that a new, expanded arrangement can be worked out.
“This year for the first time we began importing gas from Turkmenistan. As a next step we want to increase the volume,” he said at the OTS meeting. Curiously, Turkmenistan, although an OTS member, did not send a high-level delegation to the meeting.
By Eurasianet.org
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