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Turkmenistan needs additional investments for gas production growth

Oil&Gas Materials 3 February 2015 17:14 (UTC +04:00)

Baku, Azerbaijan, Feb. 3

By Aygun Badalova - Trend:

Turkmenistan has large gas reserves, however, the country needs additional investments to increase its production, the research assistant of the Center for the Study of Central Asia and Caucasus of the Institute of Oriental Studies Stanislav Pritchin said.

In an interview with Trend, Pritchin spoke about the prospects of diversifying the gas supply routes of Turkmenistan, in particular, through such planned projects as TAPI (Turkmenistan-Afghanistan-Pakistan-India) and the Trans-Caspian pipelines.

He said this country has large gas reserves, however, almost all volumes available for gas export have been contracted as part of an agreement with China.

"An agreement on construction of the fourth branch of the Turkmenistan-China gas pipeline was signed in 2014," he added.

At present, Turkmen gas is exported via two branches of the Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline, commissioned in December 2009. A new branch - "D" is planned to be built along the Turkmenistan-Uzbekistan-Tajikistan-Kyrgyzstan-China route.

The new gas pipeline will allow increasing the annual gas transportation by 25 billion cubic meters. As a result, Turkmen gas supplies to China will hit 65 billion cubic meters annually. Galkynysh field will be the main resource base for gas supplies to China.

At the same time, Turkmenistan has repeatedly voiced its desire to diversify its gas supply routes. TAPI gas pipeline and the Trans-Caspian pipeline in the direction to Europe are among the planned export destinations. There is the opinion that these projects are competitors. The implementation of one of them will reduce the prospects of implementing the second one.

However, the matter rests in available free volumes of Turkmen gas as part of implementing an agreement with China, rather than the competition between the Trans-Caspian pipeline and TAPI.

"The additional investments will be required to increase the production in Turkmenistan," Pritchin said.

"In case of implementing these two projects, many questions remain," he added.

"Regarding TAPI, the matter rests in security, economy: who will invest and implement the project, and how much free gas will be used for this project implementation?" the expert said.

As for the Trans-Caspian pipeline, Pritchin said that the uncertain status of the Caspian Sea, in particular, is an obstacle to this project's implementation, but in spite of all technical issues, there is an interest in this project at the political level.

Turkmenistan with its natural gas reserves ranks fourth in the world after Iran, Russia and Qatar. Turkmenistan's largest resources are concentrated in the Mary region in the east of the country, namely "Galkynysh" and "Yashlar" fields with total reserves, estimated at 26.2 trillion cubic meters of gas by local geologists and British GCA company.

According to the BP World Energy-2014, more than 62.3 billion cubic meters of gas were produced in Turkmenistan in 2013. This exceeds the production level of this type of fuel by 0.4 percent in 2012.

At present, Turkmen gas consumers are China, Iran and Russia.

The design capacity of the TAPI will be up to 33 billion cubic meters of gas per year.

The total length of TAPI will reach 1,735 kilometers. Some 200 kilometers of the pipeline will run through Turkmenistan, 735 kilometers - through Afghanistan, 800 kilometers - through Pakistan to the settlement of Fazilka, located on the border with India.

The TAPI construction can begin in 2015, the Turkmen side said.

The Trans-Caspian pipeline project envisages the laying of around 300 kilometers long gas pipeline under the Caspian to the shores of Azerbaijan. Further fuel can be transported to Turkey, which has mutual borders with European countries.

There are no direct agreements for the implementation of the Trans-Caspian gas pipeline. The negotiations have been conducted among the main concerned sides, namely, EU, Azerbaijan and Turkmenistan since 2011.

Edited by CN

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follow the author on Twitter: @AygunBadalova

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