“It’s better than bringing it from Iran’: Tatarstan offers Turkmenistan cement barter

Geopolitics has influenced trade turnover with Turkmenistan

Each side holds meetings of the group in turn, this time Kazan has hosted guests from Ashgabat. They discussed 12 issues on cooperation in key sectors of the economy: the oil and gas industry, mechanical engineering, agriculture, medicine, sports, tourism and other areas. Minister of Finance and Economy of Turkmenistan Serdar Joraev noted that trade and economic relations between his country and Tatarstan are strengthening, but not in the same volumes as before:

“Geopolitical risks, as well as sanctions imposed against the banking structure of the Russian Federation, have affected a slight decrease in inter-trade turnover between our business entities. Although in 2023, inter-trade turnover increased by 13.4% compared to 2022 and amounted to $52.3 million, mainly due to an increase in imports of Tatarstan products to Turkmenistan. I would like to note that in 2019-2020, our inter-trade turnover was twice as high as this volume. We consider it important to intensify our relations, to consider possible mechanisms, reforms of trade relations and mutual settlements.

In his opinion, the parties have great potential in the development of many industries. The visits of the leaders of Turkmenistan and Tatarstan played an important role. Agreements have been reached on cooperation in various sectors of the economy.

“Yes, in 2023 the volume of trade increased, but this year we see that the trend is going down. We have just talked, there are some issues that need to be discussed at the highest level. But all the same, our cultural relations, our meetings favour the improvement of economic relations," said Oleg Korobchenko, the Tatarstan deputy prime minister, minister of industry and trade of the Republic of Tatarstan.

Turkmenistan cannot settle accounts with Tatneft and Ak Bars

Tatarstan industrialists spoke in more detail about cooperation and the problems that arose. The director of the branch of Tatneft PJSC in Turkmenistan, Ildar Burganov, spoke about the reasons for the decline in production. Since 2010, Tatarstan oilmen have provided services to foreign colleagues to increase oil production, and now they are working at the Goturdepe field. Due to more than 330 geological and technical measures, more than 760,000 tonnes of oil were additionally extracted. With current production, it is planned to exceed the 800,000 tonnes mark by the end of the year.

The creation of a production facility for the repair of pumping and compressor and drill pipes, as well as the production of medical polypropylene in Turkmenistan, was named a priority. Together, the issue of forming a medical cluster in the city of Arkadag for the production of saline solutions and medicines was studied, since Turkmenistan now buys saline solutions abroad. But it is impossible to promote further cooperation without settling the issue of international settlements.

“Today we have problems in paying for the work performed. We cannot receive payment since August last year. According to the state concern Turkmengaz, this is due to that the payment is not accepted by the relevant bank, Vnesheconombank. We would like to announce a proposal and ask you to consider it. It is very important for us to solve this problem," Ildar Burganov said.

As for the reduction in oil production, according to him, there are currently no potentially effective wells at the current field: “In this regard, work is underway to agree on the terms of a new contract, which provides for the expansion of the territory of activity to all fields of the state concern.”

As a solution, the speaker proposed to resume mutual settlements in rubles and US dollars: “We cannot receive funds to Russia as part of payment under the current contract. Also, today there is a problem of transferring ruble payments from Russia in order to implement the current activities of the branch directly on the territory of Turkmenistan.” Another option is to expand the network of correspondent accounts of the State Commercial Bank of Turkmenistan to increase the possibilities of mutual settlements in other currencies, as well as the use of settlements using the System for Transfer of Financial Messages (SPFS).

Alexander Yemelyushin, the deputy director general for external cooperation of Ak Bars Shipbuilding Corporation JSC, spoke about the transfer to Turkmenistan this year of two high-speed passenger vessels of the A-145 project, which are successfully operated in the Caspian Sea:

“All issues related to the operation of ships are being resolved promptly. Today, the only unresolved issue remains the payment of the final payment in the amount of 19.5 million rubles, which is calculated from the end of 2022. All additions to the contract with the merchant marine have been signed. A number of options have been considered, and there is a solution for today. It is simply necessary to speed it up, we kindly ask that the issue be included in the minutes of the meeting and hope for understanding.”

Tatarstan offered Turkmenistan cement barter

Another solution to the problem of international interbank settlements was found during the speech of a guest from Ashgabat. The leadership of the Ministry of Industry and Construction Production of Turkmenistan spoke about the development of production of high-quality building materials in this country. In particular, they talked about the launch of several cement plants and the expansion of their export supplies. The idea was strongly supported by Oleg Korobchenko:

“Tatarstan is building a huge number of facilities, and for the third year in a row we have had a shortage of cement. This year we have already brought cement from Iran, five thousand barges, at least four ships. I think, just according to our mutual settlements, what the shipbuilding corporation and Tatneft have announced, maybe we should look at the issue of mutual settlement particularly for cement? Please: talk to our Deputy Minister for Construction, work out the issue together, you can make a triple agreement on the import of cement. If we don't make it this year, we'll make it next year. Our ships are chartered, they go to Iran and return. They can stop by and load cement on the way, right?"

Serdar Joraev also welcomed the initiative: “In addition to the capacities that we had, this year we have launched two cement plants with a capacity of 1 million tonnes each. Therefore, I think we have a huge potential, we can work on this issue.” The Tatarstan deputy prime minister proposed to include the issue in the protocol: “The situation with cement is not going to improve next year. Rather than bringing it from Iran, I think it would be much better from Turkmenistan.”

Marat Garifullin, the director of the Turkmenistan region of KAMAZ Foreign Trade Company JSC, spoke about the work of four foreign service centres, which are provided with original spare parts and oils.

“We propose to open the next facility where we could start production of equipment on site. Various options have been considered, to the point that even the chassis can be assembled on site. Moreover, we propose to create it under the name of a local brand," he said.

Serdar Joraev supported the idea, noting that the products of the Tatarstan company are very widely represented on the Turkmen market. “We also talked about this at previous meetings — about setting up production in Turkmenistan," he added, stressing that this could be a joint venture.

KAMAZ plans to supply more than 100 units of equipment to Turkmenistan by the end of the year. Now the branch is working with the private sector but is ready to conclude a state contract: “Now it is in the stage of elaboration, discussion and approval of the technical part," Garifullin said at the end of the meeting to Realnoe Vremya.