VZCZCXRO3356
PP RUEHIK
DE RUEHAH #0035/01 0081119
ZNR UUUUU ZZH
P 081119Z JAN 10
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 4037
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 6097
RUEHBJ/AMEMBASSY BEIJING 3789
RUEHKO/AMEMBASSY TOKYO 3648
RUEHIT/AMCONSUL ISTANBUL 4339
RUCNDT/USMISSION USUN NEW YORK 1391
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 4273
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000035 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB; NEA/IR 
ENERGY FOR EKIMOFF/BURPOE/COHEN 
COMMERCE FOR EHOUSE/DSTARKS 
 
E.O. 12958: N/A 
TAGS: EPET PGOV EINV ETRD IR TU TX
SUBJECT: TURKMENISTAN OPENS SECOND GAS PIPELINE TO IRAN 
 
REF: 09 ASHGABAT 886 
 
ASHGABAT 00000035  001.2 OF 002 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY: On January 5 - 6, Iranian President 
Ahmadinejad visited Turkmenistan to hold negotiations with 
Turkmen President Berdimuhamedov and attend the opening 
ceremony of the Dovletabat - Sarakhs - Khangiran gas pipeline, 
the second gas pipeline linking Turkmen gas fields to Iran 
(reftel).  The two presidents had an official meeting on 
January 5 during which a number of intergovernmental and 
commercial documents were signed.  On January 6, they traveled 
to the Sarakhs district located in southeastern Turkmenistan 
to inaugurate the gas pipeline.  Turkish Minister of Energy 
and Natural Resources Taner Yildiz also attended the pipeline 
opening and met with the Turkmen and Iranian presidents.  END 
SUMMARY. 
 
¶3.  (SBU) During the visit, the Iranian and Turkmen 
Governments signed the following intergovernmental documents: 
a Memorandum of Understanding on Cooperation in the Area of 
Cultural Heritage between the Turkmen Ministry of Culture and 
Broadcasting and the Iranian Organization of Cultural 
Heritage, Crafts, and Tourism; a Program of Cooperation 
between the respective Ministries of Foreign Affairs; and an 
Agreement on Conducting Unilateral Aerial Mapping. 
 
¶4.  (SBU) The Turkmen Ministry of Railway Transportation also 
signed a $696 million contract with the Iranian Pars Energy 
Company for construction of a 325 kilometer railroad line 
between Bereket and Etrek.  The construction will be financed 
through a $324.8 million loan provided by Pars Energy and a 
$371.2 million loan provided by the Islamic Development Bank 
(IDB).  The Turkmen Government also signed a loan agreement 
with the IDB to that effect during the same meeting. 
 
¶5.  (SBU) Berdimuhamedov and Ahmadinejad went to Sarakhs on 
the morning of January 6 to inaugurate the Dovletabat - 
Sarakhs - Khangiran gas pipeline.  The pipeline inauguration 
was initially planned for the end of December 2009, but was 
rescheduled for January 6 due to undisclosed reasons.  (NOTE: 
Media reports speculated the postponement was due to recent 
protests in Iran.  END NOTE.)  The new pipeline is 1020 
millimeters in diameter and 60 km long with the capacity to 
transport 12.5 billion cubic meters (bcm) of natural gas 
annually.  This pipeline is the second gas pipeline from 
Turkmenistan to Iran.  The Korpeje - Kurtkui gas pipeline 
located in western Turkmenistan was built in 1997 and also has 
a 12.5 bcm capacity. 
 
¶6.  (SBU) According to a Turkmen - Iranian agreement signed in 
July, 2009 (reftel), 14bcm is set as a benchmark volume with 
the understanding that the volume can be increased with mutual 
consent -- normal practice in gas agreements.  Since July, both 
Iran and Turkmenistan have been talking about volumes up to 
20bcm in the next few years.  However, according to 
Turkmen energy experts, total gas exports to Iran are unlikely 
to exceed 10 bcm in 2010 (three of which will be exported 
through the new pipeline) since Iran is unlikely to sharply 
increase gas consumption during the first year of expanded 
supplies.  In addition, export volumes could reach the target 
14 bcm per year only after Iran constructs a 150-kilometer 
internal extension of the new pipeline in order to transport 
Turkmen gas to the Sangbast area of the Razavi Khorasan 
province in eastern Iran.  Iran plans to complete the 150 
kilometer extension by the end of 2011.  The two countries 
have announced longer term plans to increase the volume of gas 
exports up to 20 bcm. 
 
 
ASHGABAT 00000035  002.2 OF 002 
 
 
¶7.  (SBU) On the evening of January 5, President 
Berdimuhamedov also met with Turkish Minister of Energy and 
Natural Resources Taner Yildiz, who was in Turkmenistan for 
the opening of the pipeline.  Local media sources reported 
that the two officials emphasized the importance of the 
Dovletabat - Sarakhs - Khangiran pipeline not only for 
Turkmenistan and Iran, but also for other countries in the 
region, including Turkey. 
 
¶8.  (SBU) COMMENT: The new pipeline is economically and 
politically significant for Turkmenistan.  It will not only 
allow Turkmenistan to increase gas exports to the Iranian 
market, but gas shipped to Iran could also continue westward. 
In 2010, Turkmen gas will be exported to China, Iran, and 
Russia, marking significant progress in the country's efforts 
to diversify its export markets.  END COMMENT. 
 
CURRAN