The inauguration of the 7,000 km long major overland pipeline last week to carry gas from Central Asia to China and bypassing Russia marks a major geopolitical turning point.  Turkmenistan is at the heart of a global poker game for Central Asian natural resources.  Ashgabad now faces a difficult question: will the pipeline bring it new autonomy from Moscow or simply a new master in Beijing?  Here’s what the experts think.

We can see already clear winners and losers emerging from the heated competition for Central Asian natural resources. Michael Lelyveld, a correspondent with Radio Free Asia, remarked to me:

China is obviously the big winner and Russia is the big loser. Russia’s influence has decreased while China’s has increased. Russia is not getting gas from Turkmenistan but is also not able to sell gas to China.

[This is] a big step for Turkmenistan, probably the biggest step it has taken in many years.   They have had to deal with Russia and fight over prices.  In the Nineties, Turkmenistan was bartering for its gas, [getting] products from Ukraine that it could not really use.  China [is] sending cash.  It’s a big boost for Turkmenistan which is no longer just dependent on Russia in selling gas.

Robert Ebel, director of the energy program at the Center for Strategic and International Studies in Washington D.C., agrees. He said to me:

It’s a success politically and economically by being able to negotiate, build a pipeline and deliver to China. They secured a market in the East which is very important for Turkmenistan.

The pipeline is going to reach full capacity in 2012-2013 and is set to deliver an initial 5-10 billion cubic meters of gas.  RIA Novosti has remarked in an editorial,

It is easy to calculate that, in a worst-case scenario, China could take Russia’s place as the largest exporter of Turkmenistan’s gas. Yet, Russia still has time to try to reverse this possibility.

It’s no surprise, then, that Medvedev is set to pay an official visit to Turkmenistan on 22 December.

Who’s got the hidden ace?

When an explosion occurred along the Central Asia-Tsentr-4 pipeline connecting Turkmenistan to Russia erupted in April, gas exports were halted and Turkmenistan was deprived of revenues, losing $ 1 billion in sales each month.  Moscow blamed “purely technical reasons”; Ashgabad protested the abrupt cessation in gas imports.

Since the incident, Moscow has tried to make new offers to get the gas flowing again but a series of talks between the two sides have proven unproductive.  Meanwhile, Ashgabad has stepped up its efforts to solicit new customers; its inclination toward China in particular has grown.  For example, in June, China provided a loan of 4 billion dollars to Turkmenistan.  Offers to invest and develop its onshore deposits have been abundant, but so far only China’s CNPC has been admitted.

Additionally, in previous years approximately 40-50 bcm  meters of gas a year were purchased annually by the Russian energy giant Gazprom and a relatively modest amount of 8 billion cubic meters of gas annually were sold to neighboring Iran.   To reduce its reliance on Russian-owned export routes, Ashgabad is now planning to ship another 6 billion cubic meters of gas to Iran.

So far, Ashgabad seems to be putting on a good poker face, playing competitors off each other. But as the country’s heavy dependence on gas continues, it may one day leave the country vulnerable to pressure from the other players.  After all, the changing market price of gas is a matter for constant re- negotiation and re-orientation.  Ebel remarks,

They have to be careful not to be seen as supporting the East, West or Russia and maintain neutrality. [But] Berdimuhammedov is playing the game more wisely than Niyazov did.