This analysis will deal with the development of the energy sector in Turkmenistan from a geo-economic perspective, Turkmenistan's foreign policy and its orientation problems from a geopolitical view, the situation of Turkmenistan in pipeline diplomacy and its significance for energy security for Turkey and Europe from a Trans-Caspian framework. Finally, we will look at initiatives by Turkmenistan's new leader Kurbanguly Berdymuhamedov to make Turkmenistan a key player in global energy geopolitics.
Firstly, we should mention that the significance of Turkmenistan arises from its hydrocarbon resources. Its proven natural gas reserve is 2.9 billion m3 (102 trillion ft3) and its potential reserve is 4.5 billion m3 (159 trillion ft3). These reserves place Turkmenistan as the fourth largest in the world and first amongst Central Asian countries. This data show's Turkmenistan's significance in global energy geopolitics and that it can become a key actor in the future. However, being rich in energy resources is not enough on its own to turn a country into a global actor. Russian monopoly in transporting Turkmenistan's energy resources to international markets ties Turkmenistan both politically and economically to Russia. Consequently, Turkmenistan's bid for becoming a strategic actor in global energy geopolitics is linked to freeing the state from Russian hegemony. This highlights the significance of the administration's policies and makes the new leader Berdymuhamedov the centre of attention.

The Development of Turkmenistan's Energy Sector from a Geo-economic Perspective
We should begin by presenting the geo-economic significance of Turkmenistan in the global energy sector. The economic activities of Turkmenistan are shaped by changes in the energy sector, where it gets 85% of its annual income, and this figure alone shows that the energy sector is the most significant source of income for Turkmenistan.
Turkmenistan's hydrocarbon reserves and the transportation of these products can affect the global energy sector, with the natural consequence that these global energy markets are in turn interested in the development in the energy sector of the country. Ultimately, it is well known that Turkmenistan has serious problems with decreased energy production in its energy sector due to the lack of investment and advanced technology. The most significant reason for Turkmenistan suffering from a lack of foreign investment despite its huge potential is its restrictive regulatory provisions in the bidding process and the arbitrary behaviour of its administration with demands for bonuses as advance payment for example.
Another reason is that the energy revenues of the country are not transformed into investments. The dominance of the patronage system on energy revenues is the cause of this, or in other words, the paradox of the rule of a sole leader. This situation results in the bad management of energy revenues. In fact, a large part of energy revenue (70%) is spent on grandiose construction projects.

In order to solve the problems that Turkmenistan is experiencing in the energy sector, the rapid liberalisation of the economy and energy sector is a necessity. As the development of the country is linked to the energy sector, the Turkmen administration should encourage and facilitation investment from outside countries, especially from the West, such as the USA, Europe, China, Russia, Iran and Turkey and multi-national corporations. The point that should be carefully examined here is that the energy sector is not only linked to economic and political factors, but also linked as a whole and mutually to geo-economic and geopolitical factors. Because of this, a multi-directional and balanced geo-economic and geo-political diplomacy should be pursued.

Turkmenistan's Foreign Policy and Directional Problem from a Geopolitical Perspective
The "permanent neutrality" of Turkmenistan, which was recognised by the United Nations in 1995, causes a directional problem in conducting the state's foreign policy. This neutral status initially helped the state to step out of regional and global rivalry in the short run, but at the same time, it isolated the state from developments in the world and disabled regional and global integration. However, this position seems to have changed with Berdymuhamedov's rule. The new administration declared that they would pursue a policy of openness at a Ministerial Meeting on 19 March 2007. We can interpret this as a new approach in Turkmenistan's foreign policy and a shift from its neutral status. The expectation from the new administration was a change in foreign policy or at least to escape isolation, as changing international conjuncture was pressurising the neutral status of the state. Intense diplomatic contact by Berdymuhamedov seemed to signal that Turkmenistan would pursue at least an active foreign policy. However, an important point should be mentioned; the necessity of conducting a multi-directional and balanced foreign policy.
Two other important problems in Turkmenistan's foreign policy are the dominance of Russia and the dependency of its foreign policy on the energy sector. In the short term, the dominance of Russia will continue. However, China and the West can balance Russia's influence. In fact, Berdymuhamedov's search for support from the US at the UN meeting in New York can be seen as an attempt to counter-balance this dominance. On the other hand, Turkmenistan is of high strategic value for a rising Russia. For instance, Russia's energy strategy is based on Turkmenistan. Russia, with the help of its current pipeline network monopoly, buys Turkmen gas at a very low price and sells it to other consumers for a high price. Because of this, it is not easy for Russia to give up its monopoly over Turkmenistan. From this perspective, the distancing of Turkmenistan from Russia means the breaking of Russia's monopoly in Eurasian energy geopolitics. Additionally, Turkmenistan would face Russian resistance while trying to develop relations with the US, Europe and China, which would be an alternative and rival to Russia. Consequently, when the latest round of diplomatic interactions are examined, the US and European attempts to develop relations with Turkmenistan will encounter Russian counter moves.
On the other hand, Turkmenistan's foreign policy is based on energy diplomacy. In other words, energy resources, pipelines and routes of these pipelines influence foreign policy. Unfortunately this weakens the chances of success for any new approach to Turkmen foreign policy and the effectiveness of any such policies. For instance, the supply of Turkmen natural gas to the international market via the Gazprom network (Gazprom owns 44% of stocks of the state-owned Turkmenneftgaz company, which is responsible for the export of Turkmen gas), means that the supply of gas is under the control of Russia, and enables Russia to influence and direct the state's foreign policy.

Turkmenistan's Position in Pipeline Diplomacy
Turkmenistan has the potential to become the energy production centre of Eurasia. The realisation of this potential is linked to the new administration's conduct of successful, multi-directional and balanced cooperation policies in pipeline diplomacy. The options are three possible routes: Russia in the north (should not be overlooked as an alternative), South Asia and Iran (especially China and India) in the south and Turkey and Europe (Trans-Caspian and Nabucco) in the west.
Currently, there are three potential projects for Turkmenistan. First is the Central Asia pipeline project known as TAPI or Centags, which was planned to pass through four states (Turkmenistan-Afghanistan-Pakistan-India), signed in 2002 and at the project stage, expected to be 2043 km long and cost $3.5 billion dollars (based on 2005 calculations). The level of stability in Afghanistan will determine the future of this project. The second significant project is the Turkmenistan-China natural gas pipeline. This would be the worlds longest and most expensive project, the pipeline is expected to be 6,999 km long and cost $26 billion dollars. China renewed its attempts for the realisation of this project at the China-Turkmenistan Cooperation Agreement on July 2007 with the new administration. The construction of a pipeline, which will pass through Kazakhstan and Uzbekistan, is planned to finish in 2009. This project, which has a high strategic value for the increasing energy needs of China, can especially affect regional and global energy diplomacy. In other words, this project points out that the bulk of Central Asia's oil and natural gas could shift towards China. This would put other projects at risk because of whether or not enough gas could be supplied to them. The third project is the Trans-Caspian natural gas project.

Trans-Caspian Natural Gas Project: Turkmenistan's Significance for Turkey and European Energy Security
The Turkmenistan-Turkey-Europe gas pipeline, also known as the Trans-Caspian Gas Pipeline (TCGP) or Caspian Transit Gas Pipeline, came to realisation after the agreement between the Presidents of Turkey and Turkmenistan in Ankara in 1998 (expected to be 1641 km long and cost approximately $3-4 billion dollars).
The significance of this project arises from its potential to break Russian monopoly and where the Nabucco project, which will sustain the energy security of Europe, is linked to this project. It would guarantee energy security for Turkey, while at the same time increasing Turkey's geostrategic significance in European energy security. However, Russia, which realises the importance of the project, not only pushed the Caspian status problem to counter it, but also developed and activated an alternative project, the Turkmenistan-Kazakhstan-Russia Gas Pipeline, in May 2007. This shows that the biggest obstacle for the Trans-Caspian is not the status problem (this is just another trump card for Russia), but Russia itself.
As a result, the realisation of this project would only be possible with the support of the US to counter Russia, along with support from the European states and energy companies who play a critical role. Support from states in the region, especially Turkey, is the most important factor since the "Trans-Caspian Gas Pipeline cannot be achieved without Turkey".

The Approach of Turkmenistan's New Leader Berdymuhamedov
The permanent neutral status of Turkmenistan in the Turkmenbashi era developed into isolationism rather than neutrality, preventing Turkmenistan's integration into the global system and the perpetuation of Russian patronage. However, the Berdymuhamedov administration's new approach to foreign policy signals a positive change in the state's foreign policy.
The new leader's shift towards the West after the death of Niyazov and increased interest shown by the US and the EU towards the country are indicators that Turkmen gas will become the centre of Central Asian energy rivalry. Since Turkmenistan gained its independence in 1991, up until the Berdymuhamedov presidency in February 2007, Russia has enjoyed a 16 year monopoly over Turkmenistan's energy resources. However, because of the increasing interest of the West and the new leader's use of his trump card (the increase in world energy supply prices), in negotiations with the Putin administration, Russia has had to accept gradual increases in energy prices so as not to lose its dominance over Turkmenistan.
Since the reconciliation process, initiated by Berdymuhamedov in January 2008, relations between Turkmenistan and Azerbaijan have entered into a normalisation process with the two states reaching an agreement on debt, which was one of the major problems. This is significant because Azerbaijan is a possible route, with the Caspian, for the transportation of the country's energy resources to international markets, especially with the successful completion of Turkmenistan's negotiations with Azerbaijan and Kazakhstan on multiple pipeline cooperation, resulting in the quest for alternatives to Russia.

The active diplomacy of the Turkmen leader and his shift towards the West is appreciated by the US and the EU, and has started the process of improving bilateral relations. In fact, the Berdymuhamedov administration had started to give signals that a different foreign policy would be conducted as soon as they got into office. Statements made by Berdymuhamedov were a further indication that he supported improving relations with the West. Berdymuhamedov started this process at a UN meeting in late-September, during a meeting with US Secretary of State Condoleezza Rice, asking for support against Russia over the dispute about gas prices. Berdymuhamedov's visit to Brussels (his first European visit) on 5-6 November is another indicator of Turkmenistan's desire to improve relations with the West. More recently the West, especially the United Kingdom, has also attempted to improve relations with Turkmenistan. In fact, while the UK Defence Minister was trying to realise defence cooperation between the two countries in his visit to Turkmenistan, an official from the Foreign and Commonwealth Office Niall Cullens was trying to realise energy cooperation at his meeting with the Turkmenistan Energy Minister in late-October. This was followed by a visit from the UK Energy Minister Malcolm Wicks to Ashkhabad, where the desire of British firms to invest in Turkmenistan was expressed and where he lobbied for the realisation of the Trans-Caspian pipeline in order to increase the functionality of Nabucco.
The reason behind the Turkmenistan quest for improving relations with the West is Turkmenistan's need for support from the West in its energy price dispute with Russia. Whereas Turkmenistan sells 1000m3 of gas to Russia for $150 dollars, Russia exports it to Europe for $300 dollars. Therefore, the aim of Europe and the United Kingdom is to regain influence in the region, where the US lost its effectiveness, and supply Turkmen gas to Europe outside of the Russian monopoly.

Conclusion
The development of Turkmenistan's energy sector is primarily linked to the liberalisation of the country's economy. Furthermore, the state needs to shift towards multi directional pipeline diplomacy in order to free itself from the state's energy and foreign policy isolation and Russian monopoly. Consequently, the Trans-Caspian project has a vital role in Turkmenistan's energy, foreign policy and future. However, the realisation of the Trans-Caspian project, which has more political concerns rather than economic, is possible with political support. This project would further enable the breaking of Russian monopoly (by-passing Russia) and freeing the region's states, especially Turkmenistan, from Russian hegemony.
The strategic value of the Trans-Caspian, as a geopolitical project, arises from sustaining the energy security of Turkey and the European Union. Consequently, the Trans-Caspian is the ‘lebensraum' of Turkey and Europe. Turkmenistan will supply the bulk of the gas, and therefore, it is the sine qua non of the project. We expect that the rivalry over Turkmenistan will increase and it will become a key player in global energy geopolitics.
The intense diplomatic contacts established by the new Turkmen leader shows that he has chosen to conduct a foreign policy that is proactive, multi-directional and counter-balancing, much different from his predecessor Niyazov. The reason for this choice and the improvement of relations with the West is the energy price dispute with Russia, which can be a breaking point in Russo-Turkmenistan relations. In addition, the Turkmen leader's bid for establishing close relations with the West can be seen as a move for increasing gas prices in the short run against Russia. In the long run, Turkmenistan is looking for a strategic ally against Russia on the energy issue. In short, Turkmenistan is central in energy diplomacy for both Russia and the West. The continuation of Russian monopoly in Eurasian energy geopolitics is, to some extent, linked to its influence over Turkmenistan. In the same way, for the West, the way to realise the Trans-Caspian and Nabucco projects lies through Turkmenistan. Similarly there is a high probability that China will join the energy rivalry over Turkmenistan. Therefore, we expect the rivalry between Russia, China, Europe, Iran and Turkey over Turkmenistan to increase. In conclusion, Eurasian energy diplomacy and rivalry is focusing/will focus on Turkmenistan's natural gas.

*Caucasia & Central Asia Specialist Global Strategy Institure