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. Last Updated: 07/27/2016

Gazprom Deal Secures Russia-Turkmen Ties

President Boris Yeltsin feted Turkmen President Saparmurat Niyazov on Thursday following the signing of sweeping economic agreements between the two republics that would give the Russian natural gas monopoly, Gazprom, access to the last untapped market in the former Soviet Union.

As befits a foreign head of state, Niyazov was treated to a Kremlin dinner with Yeltsin.

"We are friends with Saparmurat Niyazov and we have no secrets from each other," said the Russian leader of his counterpart. In his country, Niyazov is not referred to by name but as Turkmenbashi, or "father of all Turkmen."

The cordiality of the meeting and the red-carpet treatment Niyazov received was matched by the momentous agreements signed during his visit.

Niyazov and Prime Minister Viktor Chernomyrdin signed a major natural gas deal Wednesday night, ordering the formation of a joint venture between Gazprom and Turkmenneftegaz, the Central Asian state's monopoly natural gas provider.

The new company would be involved in prospecting and extraction of gas in Turkmenistan and building new gas export pipelines.

"The government uses Gazprom as its representative plenipotentiary to former Soviet republics," said one Western economist, who asked not to be named. "As a supercorporation, Gazprom would have been able to make this deal by itself, but the fact that it was signed on an intergovernment level is in line with the government's policy of integration within the CIS."

Turkmenistan has the third largest natural gas reserves in the world and is the fourth biggest exporter of gas, with an output of about 35.8 billion cubic meters in 1994. The country has exported about 70 percent of that, mostly to other former Soviet republics.

But Russia has so far allowed it little access to its export pipelines, controlled by Gazprom. Turkmenistan announced a multibillion-dollar project to build a new pipeline through Iran, but had difficulty finding investors for the project.

On Thursday, there were indications that Gazprom would take part in the project and help Turkmenistan build export pipelines to other Asian nations.

"Gazprom is now working on plans to build those pipelines, including some in the southern direction," said Leonid Smirnov, an official at the CIS Ministry, who helped draft the deal.

Turkmenistan Deputy Prime Minister Khyakim Ishanov told the RIA news agency Thursday that Gazprom would help Turkmenistan build a $3 billion pipeline to Pakistan through Afghanistan.

Gazprom already owns stock in pipelines in Belarus, Moldova, Ukraine and the Baltic states. Turkmenistan, since it is not dependent on Russian gas supplies, has previously gone it alone, preferring to look for investors outside the former Soviet Union. But the new deal opened this last frontier to the Russian flagship company.

"We only do what's profitable for us," said Gazprom spokesman Vladimir Podelyakin. "But our interests fall in with the need for integration within the CIS, which the government feels."

Apart from the gas deal, Russia and Turkmenistan on Thursday signed a trade agreement effective until the year 2000 (the longest such treaty Russia has with any former Soviet republic) and political agreements on the rights of ethnic minorities in the two nations.

During the talks, Yeltsin stressed the need for Turkmenistan's help in establishing friendlier relations between Russia and Afghanistan. Turkmenistan has a long, peaceful border with the militantly Islamic country, and Yeltsin said Niyazov might help make peace between Afghanistan and neighboring Tajikistan.

To mark the occasion, Niyazov presented Yeltsin with an Akhal-Tekke thoroughbred racehorse. After some confusion, Yeltsin's protocol service arranged for the horse to be handed over "outside the Kremlin," said Yury Burtsev, deputy chief of the protocol service.

It was the second horse Yeltsin has received from Niyazov. The Russian president has been given numerous quirky gifts as he traveled through the former Soviet Union, from a heavy truck in Minsk, Belarus, to a bear during a trip to the Far East.

"At least he has not been given an elephant yet," Burtsev said.