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DE RUEHAH #0686/01 1540924
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P 030924Z JUN 09
FM AMEMBASSY ASHGABAT
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UNCLAS SECTION 01 OF 02 ASHGABAT 000686 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
ENERGY FOR EKIMOFF/THOMPSON 
COMMERCE FOR HUEPER 
 
E.O. 12958: N/A 
TAGS: EPET PGOV EINV TX RS
SUBJECT: TURKMENISTAN: 195 GAS WELLS SHUT DOWN AS RESULT OF 
HALT IN GAS DELIVERY TO RUSSIA 
 
REF: ASHGABAT 0462 
 
¶1.  (SBU) SUMMARY: A Turkmen official recently provided 
further details about the impact on Turkmenistan of the 
halt of gas exports to Russia.  The information sheds light 
on the damage that the dispute may be inflicting on 
Turkmenistan's gas infrastructure.  An astounding 195 gas 
wells have been shut down, and a mid-level Oil and Gas 
Ministry official assessed that the shutdown itself has 
likely damaged many of the wells, and that they will be 
costly to repair and make operational again.  Some older 
wells may be irreparable.  Given the likely cost of this 
dispute, and its seemingly prolonged nature, Turkmen 
officials may choose to make more details on the situation 
public to gain international support for their plight. 
END SUMMARY. 
 
¶2.  (SBU) Dr. Odek Odekov, Director of the Turkmen Geological 
Research Institute, said at the recent 2009 CIS Oil and Gas 
Conference in Paris that Turkmenistan had to shut down 195 
wells to halt gas exports to Russia following the April 9 
blast at the Central Asia - Center 4 (CAC-4) gas pipeline 
(reftel).  Dr. Odekov also stated that Turkmenistan and Russia 
are now in the process of negotiating the payment of damages 
for the blast and might turn to international arbitration if 
the issue is not settled in the course of negotiations. 
(NOTE: Turkmenistan has already lost an estimated $1.8 
billion, which is about 10 percent of the country's 2008 GDP, 
based on the estimated volume of gas not delivered since 
April 9.  END NOTE) 
 
¶3.  (SBU) Reiterating the Government of Turkmenistan's 
official version of events, Dr. Odekov blamed Gazprom's 
subsidiary Gazpromexport for the blast.  He emphasized that it 
usually takes up to three days to prepare the gas production 
and transportation facilities for a shut-off, whereas the 
Russians gave only one-day notice.  Dr. Odekov also mentioned 
that the pipeline has been repaired and the flow could be 
resumed after the two sides come to an agreement. 
 
¶4.  (SBU) A mid-level Oil and Gas Ministry official told local 
pol/econ staff in a phone conversation that the numbers 
provided by Odekov are realistic and that the pipeline was 
fixed three or four days after the blast.  The official also 
mentioned that it will require significant labor resources and 
time for Turkmenistan to restart the wells.  Most of the gas 
fields supplying the CAC-4 gas export system have been under 
exploitation for more than twenty years, and the wells in 
those fields fill with water if the wells are shut down for a 
long time.  To restart the wells, Turkmengaz engineers will 
need to carry out a costly process that takes about three days 
to clear the water out of the well, although the water-removal 
work can be conducted on a number of wells simultaneously. 
Also, it is possible that engineers will be unable to restart 
some low-pressure wells. 
 
¶5.  (SBU) COMMENT:  Turkmenistan remains committed to its 
hard-line approach to the gas dispute, despite financial 
losses caused by the gas stoppage.  There is insufficient 
information to estimate the cost of reversing the damage done 
to Turkmenistan's gas production and transportation 
infrastructure, but given the number of shut down wells, one 
can guess that the cost will be substantial.  It is the first 
time that the Government of Turkmenistan has officially 
mentioned the number of wells it had to shut down because of 
the gas flow interruption.  This gives us reason to believe 
that the government might reveal more information about the 
losses suffered if the dispute persists or becomes the subject 
 
ASHGABAT 00000686  002 OF 002 
 
 
of arbitration proceedings.  END COMMENT. 
 
MILES