Turkmenistan is trying to shed its longstanding image as a hermit kingdom, at least when it comes to natural gas exports.  Over the past few months, Ashgabat has gone on a deal-making binge that, over the long term, could significantly alter the European Union’s energy-import pattern.

The centerpiece of Turkmenistan’s gas export diversification push is a swap arrangement with Iran and Turkey under which Ashgabat is expected to supply Ankara with 1.3bn cubic metres (bcm) of gas by the end of 2025, with annual supplies slated to increase to 2 bcm in following years. The gas started flowing on March 1. 

Regional analysts noted that the Turkish supply deal is the first of its kind in which Turkmen gas heads West along a route that bypasses Russia. According to some projections, the volume of Turkmen exports to Turkey and beyond to the European Union could reach 65 bcm within the next 25 years.

The swap arrangement at present  “supplies only modest volumes [to Turkey], [but] its strategic significance lies in strengthening Europe’s energy diversification,” wrote political analyst Rauf Mammadov in a commentary published by the Anadolu News Agency. It potentially “provides European nations with greater leverage in future energy negotiations, particularly if Russian gas supplies are reinstated.”

Another regional observer, Hikmet Eren, head of the EkoAvrasya Foundation, an Ankara-based nonprofit entity dedicated to promoting stronger ties among Turkic states, characterised the Turkish-Turkmen deal as capable of altering the EU’s centre of gravity, in terms of energy imports.

“The step taken today is not just a commercial agreement; it has the potential to redefine regional power balances,” Eren told the Türkiye Today news outlet on March 3.

In addition to the Turkish gas-swap arrangement, Turkmenistan is set to expand exports to neighbouring states, Afghanistan, Kazakhstan and Uzbekistan. The Kazakh state-run gas company QazaqGaz announced it is accelerating expansion of a pipeline connecting the two countries that will double the volume of Turkmen gas exports. QazaqGaz chief executive Sanzhar Zharkeshov also visited Ashgabat on February 28 for discussions on joint exploration and production projects. 

“Both sides agreed to accelerate the work of their joint expert group to ensure effective cooperation,” according to a statement issued by QazaqGaz. “This meeting marked a natural progression of high-level strategic agreements previously reached between the two countries.”

Turkmenistan possesses what are estimated to be the world’s fifth largest proven reserves of natural gas and features what watchdog groups say is one of the world’s most repressive political systems. Until recently, Turkmen leaders had been reluctant to strike deals to send gas westward, with most the country’s exports heading to Russia and China. Regional experts believe that Turkmen wariness of engaging Western companies was rooted in a desire to seal the country off from foreign influence. One regional observer recently described Turkmenistan as “arguably the second most insular state in the world after North Korea.”

A country analysis prepared by the Germany-based Bertelsmann Foundation suggests economic pressures are pushing the Turkmen leadership to open the country economically and diversify trade, although it emphasises “the goal of these activities is not to … democratize” the political system. 

For the last decade, the country has been gripped by economic dysfunction that is impoverishing a widening sector of Turkmen society via “high losses of purchasing power [and] a lack of affordable food supplies,” exacerbated by “skyrocketing unemployment,” the report states.

It goes on to say the country has the resources to reverse the current trend. The energy sector gives the government “considerable potential for budget revenues and for boosting the economy,” but a lack of political will to maximise available economic resources has hindered the country from developing “a targeted and sustainable economic policy.”

It may be that Turkmen leaders have determined that robust economic engagement with the outside world offers the incumbent regime the best chance of enduring.  Not only has Ashgabat demonstrated heightened interest in expanding its gas export options, but also in closer integration with emerging East-West trade networks. 

The Bertelsman country report notes that Turkmenistan “badly needs financing for natural gas and other industrial projects” and the leadership “sees transit business as a potentially rich source of income.” The analysis also asserts “the government aims to demonstrate to the Turkmenistan people that the country’s policies have high value internationally.”

This article first appeared on Eurasianet here.