Sanctions imposed by the United States and the European Union (EU) on Russian energy exports are limiting export markets and foreign production limits. Recently, Russia’s state-owned energy company Gazprom revealed that the country’s gas production in the first half of the year plummeted to 179.45 billion cubic meters (bcm), which marked a year-on-year decrease of 25 percent. With the lowest gas production rates since its Soviet era days, Russia has been attempting to tackle the challenge by finding new destinations for its natural gas exports. To date, China and some Central Asian countries have been the only options for Russia’s “diversification” strategy. While importing natural gas from Russia during the winter months is critical for Kazakhstan and Uzbekistan, who are facing climate change and increased domestic demand, the shifting terrain for energy markets has also prompted Turkmenistan to diversify its export portfolio.  

As the new Russian contract reverses the pipeline flow that once transported Turkmen gas to Uzbekistan, Kazakhstan and Russia, this change now poses a threat to future Turkmen gas sales.  Changing the pipeline’s direction means Turkmenistan no longer will be able to use the Central Asia-Center (CAC) pipeline for transiting its gas. Russia’s deal with Uzbekistan and Kazakhstan is effectively blocking Turkmen access and reducing Ashgabat’s revenue stream. 

In light of economic pressure from the Western sanctions, Russia has been attempting to explore Asian markets for its natural gas exports. Specifically, Moscow’s announcement of a so-called “tripartite gas union” was announced last year, between Russia, Kazakhstan and Uzbekistan. Russia’s proposal was met with blunt responses from both Kazakh and Uzbek officials, who clarified that the cooperation would be solely based on commercial terms, and that they would not “agree for political conditions in exchange for gas.” 

According to the two-year agreement, Russian gas will be streamlined and shipped to the mentioned countries through the reversal of the CAC, which connects Turkmenistan, Uzbekistan and Kazakhstan to Russia. Last winter, record cold temperatures across Central Asia caused power outages and disruptions in gas transportation, including pipes in CAC’s Turkmenistan section, which effectively suspended gas flows to Uzbekistan and Kazakhstan. The gas supply shortage caused increased public pressure fort both the Kazakh and Uzbek governments. In an attempt to tackle rising domestic gas demands, the two governments signed the Russian agreement, which included reversing the flows of the CAC pipeline.  

Per the agreement, it was announced that starting from October 1, Uzbekistan would receive 9 million cubic meters of gas from Russia per day, totaling an annual import of 2.8 bcm. To support the increased gas supply, QazaqGaz, the state-owned gas company of Kazakhstan, has also partnered with Gazprom to manage the CAC pipeline. Repair work on Kazakhstan’s portion of the CAC delayed the inauguration to October 7. During the ceremony held in Moscow, which was attended by the Presidents of the three countries, Russian president Vladimir Putin announced that “Uzbekistan will receive an additional source of energy, ensuring continuous supply of heat and electricity to households and socially significant facilities… Kazakhstan will be able to tackle the issue of gasification in its northern and eastern areas.”  

Russia’s determination to move forward with the reversal of the CAC pipeline was received with skepticism from Turkmenistan. In response to Russian Foreign Ministry’s proposal, Turkmenistan’s Ministry of Foreign Affairs released a statement clarifying that Ashgabat was not consulted about the potential addition of new suppliers to the Chinese pipeline: “The Turkmen side considers such an approach incomprehensible and unacceptable, and our country views it as going against international law and the established practice in the gas sector.” This statement is in line with Turkmenistan’s stepped-up energy diplomacy. Turkmenistan, which has had a historic policy of neutrality, but now shows increased willingness for a return to talks with the EU, Azerbaijan and Türkiye on the construction of the Trans-Caspian gas pipeline (TCP).  

Turkmenistan continues to remain as one of China's major gas suppliers, with over 76 percent of its gas exports directed to the Chinese market. However, with the shifting dynamics in global energy markets in light of the war in Ukraine, Russia has been offering discounted energy exports to so-called “friendly” countries, which includes China. China’s pipeline gas imports from Russia saw a remarkable 54% increase in 2022, with negotiations underway on the construction of the Power of Siberia 2 pipeline from Russia’s Yamal Peninsula to China. Skeptics have pointed out that the price for Russian pipeline gas to China is expected to be steadily declining in the coming years with Russia reportedly selling gas to China for a much lower price than to Europe. 

Turkmenistan sees Russia’s attempts to increase its natural gas exports to China as a threat to its own gas cooperation interests with China. This has prompted the Turkmen side to become more proactive in energy diplomacy, especially in regard to exploring alternative routes to gas cooperation with Russia and tapping into new export markets. While the idea of bringing Turkmen gas to Europe through the Caspian Sea via the TCP is not new, the changing terrain in energy relations, especially vis-à-vis Europe’s increasing demand for non-Russian gas, has promoted the Turkmen government to become more vocal in seeking the realization of the project. 

Russia was once the primary purchaser of Turkmen gas prior to the construction of the Central Asia-China pipeline. However, its share in Turkmen exports has significantly diminished, and reversing the pipeline between Russia and Central Asia would effectively cease such gas shipments. Russia and Turkmenistan have had an erratic history in terms of gas sales, one with periodic shutdowns and price disputes, which has proven Russia a non-reliable energy partner for Ashgabat. 

While China has been importing more natural gas from Russia, it has also been somewhat cautious in being too reliant on the Power of Siberia 2 pipeline. Moreover, China has also been pushing for the construction of Line D for CAC, which would further intensify its gas cooperation with Turkmenistan. Given the short-term nature of the CAC reversal agreement, repairs to the Turkmen portion of the pipeline could result in the deal between Russia, Kazakhstan, and Uzbekistan being short-lived. Considering the low-price point Russia has been reportedly selling its gas to China, it also wouldn’t be surprising to project that Russia’s benefits from the trilateral gas agreement will not make a big difference overall. As Russia moves away from its lost European markets to find more partners in Central Asia, it’s likely that Turkmenistan will attempt to not only hold on to its interests regarding China, but also explore new options in Europe and in Central Asia. Historically known as a neutral state, Turkmenistan has become more outspoken recently regarding its willingness to work together both with Central Asian and European states in mutually cooperative terms to meet interregional and intraregional energy demands.