Turkmenistan can get control over gas prices

Turkmenistan can get control over gas prices

Azerbaijan, Baku, Jan.6 / Trend , A.Badalova /

Energy-rich Turkmenistan firmly realizes the policy of diversifying its gas supply routes, thus reducing the chances of contenders which do not have an access to it. Firstly Europe must be understand amongst the contenders, which sees the country as a potential gas supplier for its priority Nabucco project designed to transport natural gas from the Caspian region and the Middle East to the EU countries.

Turkmenistan's getting a new selling market (China) by opening a pipeline that envisages gas transportation via Uzbekistan and Kazakhstan, as well as opening the second stretch of Turkmenistan-Iran gas pipeline, which allow increasing gas supplies to Tehran up to 20 milliard cubic meters per year, can push the Nabucco project into the background. And the matter is not that gas may be not enough for this project. The country has enormous resources. According to BP, the proven gas reserves in Turkmenistan amounted to 7.94 trillion cubic meters in early 2009.

Turkmenistan signed agreements for the development of one of the five biggest fields in the world - South Yolotan with a number of foreign companies in late December. It is planned to produce annually 30 billion cubic meters of gas after putting into operation all projects in the field. According to preliminary assessments, the gas reserves in the field amount to 14 trillion cubic meters.

On the one hand Turkmenistan's diversification policy may be profitable for Europe, because it means the acceptance of Nabucco gas pipeline in the case of construction. On the other hand, a great number of potential buyers of Turkmen gas will enable the country to dictate its terms regarding the price of the fuel, and thus can make Europe to stay between profitability purchases of Turkmen gas and search other suppliers.

Price of Turkmen gas for China has not yet agreed. According to some data, China reckons on the fuel purchase for $100-130 on the Turkmen-Uzbek border. Such low prices are explained with high cost of gas transportation to the main consumption areas, which are in a decent distance from the Chinese border.

The only positive moment for Europe was cease of supplies of Turkmen gas to Russia as a result of disagreements. Even in this period the country has expressed interest to supply its gas via the Nabucco pipeline and announced the policy of diversification of supply routes. At present, the relations between the two countries are being established. Losing so favorable partner in the price point of view is not in the country's interests. The countries agreed to restore Turkmen gas supplies in the amount of 30 billion cubic meters from early 2010. The cost of gas for Russia would be determined by the European formula.

Thus, Turkmenistan along with several directions of its gas sale, as well as the resumption of gas relations with Russia can simply cool off the Nabucco project. Moreover, taking advantage of great demand for its gas, the country can use the opportunity to offer higher prices for its gas, as it has already occurred towards Russia. In his sense Europe can not be the exception.

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