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    Ashgabat Eyes Western Gas Exports


With its only major buyer, China, seemingly happy with its amount of imports, struggling Turkmenistan is seeking old and new transit corridors to regain markets.

by: Dalga Khatinoglu; Ilham Shaban

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Ashgabat Eyes Western Gas Exports

Turkmenistan is ready to supply gas to the Commonwealth of Independent States (CIS) and eastern Europe through the Central Asia-Center gas pipeline system (CAC) if capacity agreements can be reached, the president’s website reported November 2.

The chairman of state monopoly Turkmengaz Myrat Archayev said during the XXII international conference Oil and Gas of Turkmenistan-2017 that it could use the existing system of gas trunk pipelines to the north, through which Turkmenistan historically exported natural gas to Russia and other CIS countries. In the event of mutually acceptable agreements with buyers, CAC could potentially be used to supply natural gas from Turkmenistan to the CIS countries and eastern Europe," he said.

Russia decreased gas intake from Turkmenistan from above 40bn m³/yr in 2008 to 4bn m³/yr in 2015 and finally stopped imports altogether in January 2016. The major plunge came in 2009 after an explosion in the pipeline transiting Turkmen gas, which Ashgabat alleged was Russia’s doing, by ceasing gas imports abruptly. The accident happened the year Turkmenistan started exports to China.

Gazprom filed a $5bn case against Turkmengaz at the international arbitration court in Stockholm for overcharging but then in November 2016 said the case had been suspended until December 31, 2018 in order to find an out-of-court solution.

Russian president Vladimir Putin visited Turkmenistan October 2, but neither he nor his counterpart Gurbanguly Berdimuhamedov announced any gas deals. However, two days after that, Russian energy minister Alexander Novak said that the sides were in discussions over both gas production in Turkmenistan and gas transit.

Archayev also said that two natural gas pipelines could supply natural gas to consumers in northern Iran. Turkmenistan stopped exports to Iran in January this year over non-payment, but it has been swapping 1.5bn m³/yr gas with Iran to be delivered to Azerbaian since October 2016.

Recently, Iran announced that it is not keen to transit or swap Turkmen gas to Turkey, but considers idea of swapping gas to Armenia, proposed recently. At the moment, Ashgabat exports only 30bn m³/yr to China.

Archayev added that Turkmenistan is interested in diversifying the transport infrastructure that can provide reliable and long-term deliveries to consumers of cleaner energy resources, by creating a ramified network of a multi-variant pipeline system. According to him, the most active project being implemented is the construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline (Tapi). Turkmenistan started construction of the $10bn pipeline – which it holds 85% stake in 2015, but after 20 km were laid, work was suspended.

He also recalled that ‘for many years, Turkmenistan, Turkey and the EU have been working on the Trans-Caspian gas pipeline (TCP) construction project, which should ensure long-term and reliable supplies of natural gas to the Turkish and European markets, if,  of course, the parties concerned reach appropriate agreements.'

Russia and Iran have already announced repeatedly their disagreement with this project, but rather than saying they fear the actual or prospective loss of market share, they have cited the undecided matter of the Caspian Sea's legal status and the lack of a treaty between the five littoral states to block such pipelines.

During the conference, Georgia's energy minister Ilya Eloshvili  also said that his country supports politically TCP. Turkey's president, Recep Tayyip Erdogan, also announced October 31 that Turkey was keen to transport Turkmen gas through its territory to Europe. At the moment, only Azerbaijan is able to export central Asian gas through Turkey.

Turkmenistan has planned to invest $46bn by 2025 on oil and gas projects.


Dalga Khatinoglu, Ilham Shaban