With four major gas pipeline developments being recorded
in as many months, Russia and Iran appear set to play a
large role in the expansion of exports to a gas-hungry
Europe. However, all pipelines, in one form or another,
appear to wind their way back to Turkmenistan, where
President Gurbanguly Berdymukhammedov appears determined to
erode Russia's stranglehold on his country's hydrocarbon
resources.
Ashgabat wishes to escape Russia's virtual monopoly on
Central Asian gas exports.
Three major new pipeline project announcements, all
involving Turkmen gas, have been unveiled by China, Russia
and Turkey respectively in the last three months, while a
fourth pipeline proposal to take gas from Russia to Italy
and Austria may also prove dependent on Turkmen gas
supplies. At the same time, Turkmenistan continues to
explore proposals for direct gas exports to Europe that
bypass both Iran and Russia. Ashgabat is still also
considering the export of gas to Pakistan and India.
This begs the question of whether Turkmenistan has
sufficient gas reserves to supply all the various current or
potential projects. It is likely to be some years before
international companies can prove the extent of reserves on
a scale that the Turkmens actually believe they possess. BP,
in its annual statistical assessment of global energy
reserves, lists Turkmenistan's gas reserves at 2.9 Tcm.
However, Turkmen officials say their country holds between
22 and 25 Tcm of gas, putting the country on a par with two
of the world's biggest reserve holders, Iran and Qatar.
Export options
Turkmenistan's gas export policy is, in essence,
relatively simple; the government will export to anyone who
can build a pipeline to their border. In addition, Ashgabat
wishes to escape Russia's virtual monopoly on Central Asian
gas exports. This was confirmed in July when Turkmen
President Gurbanguly Berdymukhammedov visited Beijing and
moved forward plans for a pipeline to take Turkmen gas east
into China.
China and Turkmenistan on July 17 signed a series of
cooperation agreements, including one on natural gas
development and production and one on natural gas purchase,
according to China's official newspaper China Daily. The
China National Petroleum Corp. and a Turkmen government
agency signed a production sharing contract, while CNPC also
signed a gas purchase deal with an unnamed Turkmen natural
gas company, the newspaper reported.
The agreements build on a pact signed last year by former
Turkmen president Saparmurat Niyazov and indicates that
Berdymukhammedov also supports the China gas line. The 2006
deal saw China agree to buy 30 Bcm/yr of Turkmen gas for 30
years. The gas is to be delivered through a pipeline built
from the right bank of Turkmenistan's Amu Darya to Urumqi
city in China's northwestern frontier Xinjiang Uygur
Autonomous Region, linking from there all the way to
southern China's industrial Guangzhou province.
The deal also included exploration rights in Amu Darya
and a reassurance that if reserves fell short the pipeline
would be supplied from other Turkmen fields. The 3,000 km
pipeline is expected to cost somewhere in the region of $10
billion and is expected to pass through Uzbekistan and
Kazakhstan. Price could yet prove a stumbling block, as
could sharing capacity and revenues with transit countries.
Nevertheless, the new agreement appears to be the most
advanced of any major export project involving Turkmen gas.
Created: August 16, 2007
