Press Conference with U.S. Special Envoy for Eurasian Energy Richard L. Morningstar

Tuesday, August 3, 2010; Public Affairs Section; U.S. Embassy Ashgabat, Turkmenistan

U.S. Special Envoy for Eurasian Energy Richard L. Morningstar (State Dept.)

Richard Morningstar: First of all, thank you for coming to this press briefing, I look forward to talking with you. The only ground rule that I would like to put forth is that I do not intend to talk about Iran because Iran is not within my area of responsibility and it would be best if I abstain from providing my opinions in respects to that matter, but I am happy to talk about anything else. I am also very pleased to be here in Turkmenistan, it’s been an excellent visit, I’ve had very good meetings and I think the United States and Turkmenistan work well together in the energy area and I think we’ll continue to work well together.

Morningstar: Now that there are no other questions…

Room: Laughter

Question: Yesterday in the meeting with President Berdimuhamedov you emphasized that the United States is ready to support Turkmenistan and provide assistance to major projects in the energy sector. Could you specify which projects were discussed and what the United States will do to support Turkmenistan?

Morningstar: Well, we had an extensive conversation and we talked about a multipronged strategy in which we could work together. We talked about the possibilities with respect to the so called TAPI pipeline, the Turkmenistan, Afghanistan, Pakistan, India Pipeline. We think that a project such as this has commercial possibilities but important issues of security have to be worked out. And we will work with Turkmenistan and other countries to look further into the issues involved in this potential project. We talked about the possibilities of Turkmenistan gas going west into the Southern Corridor, and we hope that in the coming years that this will be a possibility.

Question: The territorial dispute between Turkmenistan and Azerbaijan definitely causes an obstacle for projects through in Caspian, such as Nabucco. Would the U.S. provide any assistance or support or influence in resolving this issue?

Morningstar: Well this, you point to an issue between Turkmenistan and Azerbaijan and it is really up to Turkmenistan and Azerbaijan to try to resolve this issue. We hope very much that it will be resolved but it really is a matter between the two countries.

Question: But would the United States provide any type of assistance, perhaps act as a mediator during talks to resolve this issue?

Morningstar: We have no plans to act as a mediator in regards to the issue. I think the issues are well defined, and there have been discussions that have taken place between Turkmenistan and Azerbaijan. We hope that those discussions will continue and we hope that the two powers can resolve their issues.

Question: Could you please tell how feasible the Nabucco project really is with the falling demand of energy and processed gas?

Morningstar: Well we are in a very interesting situation right now in respect to pipelines in the so-called Southern Corridor which would go through Azerbaijan, Georgia, Turkey and on into Europe. Turkey and Azerbaijan recently reached an agreement on the pricing of Azeri gas as well as transit fees. This will allow progress to continue with respect to the Southern Corridor. The Shah Deniz Consortium and SOCAR have requested proposals from the various potential projects to go through the Southern Corridor. It will now be a commercial decision as to which project or projects will go forward whether it be Nabucco or some other project in the Southern Corridor. From the stand point of Nabucco, Turkmen gas is important. There are other sources of gas from such places as Iraq and other places in the Middle East, and we hope that Turkmenistan gas will be part of the project. But now it is up to commercial interests to determine which specific project makes the most sense.

Question: Could I follow up the question from Reuters? Is the United States concerned about China’s presence in the Central Asian region and that nation’s takeover of much of Russia’s sway there?

Morningstar: No, were not concerned. We think it’s a good thing that gas is going to China. Gas is a much cleaner form of energy than coal for example. The more gas that China uses, the better for the environment. Gas that goes to China helps to open supplies of gas from other sources that otherwise might go to China. At the same time it is important that host countries work with China as well as companies from any other country to make sure that companies are using best practices and doing the best they can do for local citizens and for the host country.

Question: Turkmenistan has been constantly raising the issue of energy transport security and we expect that soon a Turkmen delegation will be visiting New York in the UN Assembly. They will be raising this issue and pushing for the passing of a UN resolution on energy transport security. How could such resolution assist and help Turkmenistan in securing their transport routes to Afghanistan for example?

Morningstar: We certainly respect the work that Turkmenistan does with international organizations on all sorts of issues, and energy security and the protection of transit routes is of the utmost importance. But I cannot comment on any specific resolution because we haven’t seen them. And there is no question that security of transit routes would be critical to the success of a possible TAPI pipeline.

Question: Recently Kazakhstan’s president Nursultan Nazarbayev criticized the European Union for lack of pursuing the Nabucco project. How does such an accusation have corporate ground?

Morningstar: I was asked the same question in Astana. Let me answer it this way. I think over the past several months that Europe has been making a very strong and concerted effort in regards to Nabucco. I think it is coming forward with some very concrete suggestions in regard to Nabucco. But I don’t think I should speak as to what they are proposing. I will say this, that President Nazarbayev said that Kazakh gas could be a part of Nabucco, and Kazakhstan as you know already has commitments in respect to its gas going other places and has its own domestic needs for gas but I hope that over the years more gas becomes available from Kazakhstan as its oil production increases that some of that gas may go west as well as Turkmen gas.

Question: Did you discuss the issue of American companies taking part in the development of the Caspian Basin and if so, which projects?
Morningstar: During our meetings we had such discussions and we stated that American companies would like very much to participate in Turkmenistan in respect to all sorts of projects both on shore and off shore. We understand and accept that Turkmen law requires on shore participation to take place in very certain ways. American companies understand that if they are going to participate on shore that it has to be consistent with Turkmen law. We are hopeful that the government of Turkmenistan and the companies will come up with creative ways that companies can participate. And in the meantime a lot of progress is being made in regards to off shore projects. We expect that to continue and that provides some real possibilities for Turkmenistan and the companies. Ultimately any project with American participation has to be agreed upon by the companies and the government of Turkmenistan. We look forward to there being a successful conclusion of many project agreements in the future.

Question: Could you just elaborate upon what you meant when you said that you mentioned that there has been a progress in off shore projects? Please specify which companies or which specific projects you are referring to.

Morningstar: These agreements and negotiations are in process and I don’t think it would be right for me to talk publicly about what companies are in negotiations until they or the country of Turkmenistan say so. I think this is a matter that is confidential between them. If the companies or the government want to talk about them, that is up to them.

Question: Are there any seismic concerns in projects such as TAPI?

Morningstar: Seismic? Well I have not specifically dealt with seismic issues at this point in respect to any projects and these are things that occur in many places in the world and it is up to the technical experts to deal with these issues.

Morningstar: Okay and thank you very much.