Tensions are once again rising between former Soviet allies. This time between Russia and Turkmenistan over the latter’s attempts to export some of its massive gas reserves to Europe. But as far as Russia is concerned “anywhere but Europe” is the preferred destination for Turkmen gas.

It’s no secret that the EU is desperately trying to cut its dependency on imported Russian gas which supplies over a quarter of the continent’s gas needs. According to East European Gas Analysis, a US-based consultancy, Gazprom’s share of the Western European market has already fallen from 39 percent to 27 percent over the last decade, with the gas supply from Norway rising from 16 to 22 percent over the same period.

Russia has little influence over Norwegian energy reserves but as it has already shown in Georgia it is prepared to exert pressure on former Soviet allies when its key energy interests are threatened. Above all, Russia is sensitive to anyone muscling in on its lucrative Western energy market, as Turkmenistan seeks to do.

Turkmen gas: east, west or both?

What’s currently on the table between Turkmenistan and Europe is a scheme to build a four-strong tanker fleet that would ship 3 to 4 billion cubic meters (106 to 142 Bcf) of compressed natural gas (CNG) across the Caspian to Azerbaijan for onward transit by pipeline to Turkey. But an agreement due to be signed by late November has now been postponed to March 2011 after questions over Turkmenistan’s human rights record were raised in the European Parliament.

The delay marks yet another ‘moral’ victory for Moscow’s energy geo-politicking which continues to exploit disagreements over borders between the five Caspian Sea nations. The result has been to block the EU’s favoured option, a pipeline under the Caspian that could deliver up to ten times as much gas as the CNG scheme.

Tensions between Moscow and Ashgabat ratcheted up in October when the Turkmen foreign ministry publicly refuted an assertion by Russian Deputy Prime Minister Igor Sechin that the country was unlikely ever to be able to sell its gas without crossing Russian territory. Accusing Moscow of meddling in its efforts to build energy ties with Europe, a Turkmenistan ministry statement described potential European partners as “trustworthy, honourable and reliable”, a calculated sleight to Russia. Last year Moscow suspended Turkmen gas imports without advance notice. A subsequent transmission pipeline blast on Turkmen territory was blamed on Russia. While Russia resumed Turkmen gas importation in January 2010, it was in much smaller quantities. But Turkmenistan has since been losing around $1 billion a month. The Turkmen energy strategy now appears aimed at diversification away from strategic Russian influence over its gas exports.

The Turkmenistan-China pipeline, passing through Uzbekistan and Kazakhstan and opened in 2009, signalled Ashgabat’s breaking of Russia’s stranglehold on its gas reserves. Next the Iran gas link opened at the beginning of 2010, further eroding Russia’s domination of Turkmenistan’s energy sector.

But for Moscow, it’s Turkmenistan’s desire to be dealt a hand in the European market that has set Kremlin nerves to jangling, even though, having pledged to buy 10 billion cubic meters (350 Bcf) of gas directly from Turkmenistan back in 2008, the EU has yet to make its first purchase.

Meanwhile, questions still exist over Ashgabat’s ability to fulfil its burgeoning portfolio of foreign gas supply commitments east and west. And, more significantly, whether an under-sea pipeline from Turkmenistan could link up with the Europe’s ‘great pipe hope’ Nabucco, to aid its own diversification from Russian energy dependency.

Turkmenistan’s reserves

In October, Turkmenistan’s President Berdymukhamedov insisted that his country more than has the capacity to meet all of its proposed commitments and was on course to quadruple its gas exports over the next 20 years.

The president claimed that the massive South-Yoloten-Osman group of fields alone holds around 18 trillion cubic meters (tcm, 640 Tcf) of gas. That would boost Turkmenistan’s estimated gas reserves to 24.6 tcm (873 Tcf) in total. According to President Berdymukhamedov, Turkmenistan plans to export around 180 bcm (6.4 Tcf) of the 230 bcm (8.2 Tcf) of gas it anticipates it will eventually produce annually.

Currently, Russia remains Turkmenistan’s main customer, purchasing 30 bcm (1.07 Tcf) annually, a drop of 20 bcm (710 Bcf) prior to the April 2009 pipeline blast. But exports to Iran are expected to double to 20 bcm (710 Bcf) with China taking a further 40 bcm (1.42 Tcf) annually when the pipeline reaches full capacity in 2013.

But none of the deals sending gas east appear to concern Russia. It is the threat of Turkmenistan supplying Europe that seems to present the greatest concern to Russia’s energy-fuelled regional aspirations.

European market

In the last few months Russian Deputy Prime Minister Igor Sechin has gone out of his way to dissuade Turkmen gas exports to Europe. Sechin has cited depressed regional demand, over-supply, as well as asserting the EU-backed Nabucco simply has “no future”. Sechin’s assessment, especially as regards the future of Nabucco, could well be right. Both Nord and Sud Stream pipelines will be operational way before Nabucco is; that is, if Nabucco ever gets off the EU’s drawing board. On top of that, because of border disputes, the much-touted Caspian pipeline link from Turkmenistan itself has not even begun construction.

On the face of it, therefore, it seems that Moscow has little to fear even if the EU does finally overcome its human rights objections and cut a deal with Turkmenistan for a mere 3 to 4 bcm of CNG come next March.

But with oil and gas supplies central to Russia’s economic sustainability and its growth, the sixty thousand rouble question for Turkmenistan and Europe is this, if the former should get its plans for a Caspian link to Nabucco back on course; just how far will Russia go to protect its economic energy interests?

A Kremlin security document, approved by President Dmitry Medvedev and published by the Russian Security Council in May 2009, has already sanctioned the use of military force to protect Russia’s post-Soviet return to “energy superpower” status, specifically citing the Caspian as an area of potential conflict. The invasion of Georgia in 2006 – does anyone really think it was all about South Ossetia? – is powerful testimony that the Russia’s foreign policy ‘tank’ is still fuelled by oil, or gas.