US calls on Turkmenistan to diversify energy exports

By Marat Gurt

ASHGABAT, Aug 14 (Reuters) - The United States urged Turkmenistan on Tuesday to diversify its energy export routes and promised deeper cooperation with U.S. companies as Washington competes for influence over the gas-rich nation.

Daniel Sullivan, U.S. Assistant Secretary of State for Economic, Energy and Business Affairs, told reporters during a visit to the gas-rich country that Washington was ready to assist it in its transition towards a more liberalised economy.

"We believe that increased diversification of energy routes, buyers and suppliers are in Turkmenistan's long-term energy security interest," he said.

"Nations should never be left with only one option, one market, one trading partner, one vital infrastructure link."

The remarks appeared to be referring to Turkmenistan's reliance on Russia as its main conduit for natural gas exports.

The desert nation is Central Asia's top gas producer with annual exports of about 50 billion cubic metres to Russia as well as a small amount of gas to neighbouring Iran.

"We are encouraging American companies to invest in Turkmenistan to help your country grow," Sullivan said.

At the same time Sullivan urged Turkmenistan to do more to fight corruption and improve its investment climate.

"To attract private businesses, Turkmenistan needs to do its part to establish an economic environment that can attract world class American companies by undertaking reforms that increase transparency, rule of law and protection of property," he said.

Following the death in December of Turkmenistan's long-serving President Saparmurat Niyazov, Russia, the United States, China and Iran have intensified their contacts with the energy-rich and strategically placed country.

Coincidentally, Iranian President Mahmoud Ahmadinejad was in Turkmenistan on Tuesday for talks on energy cooperation.

Russia agreed earlier this year with Turkmenistan, Kazakhstan and Uzbekistan to build a new pipeline to ship Central Asian gas through Russian territory, a move the United States criticised as not good for Europe.

Last month Turkmen media reported French oil company Total (TOTF.PA) had expressed interest in cooperating with Turkmenistan after its chief exploration official visited the country for talks with Kurbanguly Berdymukhamedov, the new president.

Berdymukhamedov has also invited U.S. company Chevron (CVX.N) to explore projects in Turkmenistan. Russia's No.3 oil firm TNK-BP (BP.L), half owned by BP Plc, said last month it also wanted to gain a foothold in Turkmenistan.