European Union hurries to conclude contracts for Turkmen gas

Oil&Gas Materials 5 March 2010 16:31 (UTC +04:00)

Azerbaijan, Baku, March 5 / Trend H. Hasanov /

Brussels is in a hurry to contract for Turkmen gas; for Europe, such would have marked a breakthrough in finding alternative source of being supplied with energy. To meet energy demand tomorrow, it is essential to act today.

Experts were the first to have come to such conclusion. Speaking at the latest oil and gas conference in Ashgabat European Commission's Envoy Christobal Burgos stated, "European Union's dependence on gas import will be growing...And this is good news for Turkmenistan. We are eager to receive gas from Turkmenistan...on pipeline Nabucco".

For his part, Richard Jones, Deputy Director General of the International Energy Agency, said, "The West should sign new contracts right now". In his forecast, the demand in Turkmen gas will see a multiple increase by 2030.

Turkmenistan, in its turn, can find more profitable prices in Europe: the country currently sells its gas to China, Russia and Iran, with which Turkmenistan from time to time falls into difficult negotiations over gas supply price. The Government of Turkmenistan has already announced that gas production in Turkmenistan should increase up to 250 billion cubic meters by 2030, of which 200 billion cubic meters will be designated for export.

Agreement with Turkmenistan over Nabucco is likely to be concluded in the first half of this year. Announcing this first was Germany's RWE (a shareholder of the Nabucco Pipeline Consortium), which has already been conducing works in the Turkmen national sector of the Caspian. Volume of gas to be exported on Nabucco - 10 billion cubic meters per annum - has also been declared. According to latest news reports, the European Union expects a breakthrough in this issue to occur right this spring. 

At the same time, according to reports from Ashgabad, the Turkmen side also becomes more confident in speaking about its interest in Nabucco project.

"Europeans are offered concrete model of relations: exploration of the Caspian offshore part and construction of the gas export pipeline but on the condition that it is the responsibility of Brussels, if we speak about Nabucco, to conduct negotiations with transit countries, in particular, Azerbaijan, Turkey and some other," a Turkmen economist reported by telephone.

It has become known recently that apart from Germany's RWE, Italy's ENI and Spain's Repsol, which explore the opportunity of joining Russian consortium Itera-Zarubezhneft that has concluded a PSA over one of the promising oil and gas blocks in the Caspian, also are prepared to come to work to the Turkmen national sector of the Caspian. It is remarkable that Germany, Italy and Spain keep the 2nd, the 4th and the 9th position, respectively, in the world in terms of natural gas import.

A western observer told Trend that "The Government of Turkmenistan has repeatedly let know that the potential raw material source for Europe is the shelf reserve of the Caspian at a time when Western companies want to conquer the onshore part, especially, develop the Iolotan super gigantic gas field containing the world's fourth biggest gas reserve".

Western envoys, on a tour to the Caspian region, have intensified their efforts considerably in some latest dates. After summit talks in Ashgabad, all they made just brief statements. EU Special Envoy Pierre Morel said the EU was ready to partake in joint energy projects; US Department of State's Special Envoy for Eurasian energy issues Richard Morningstar stated that the U.S. was going to establish constructive dialogue with Ashgabad; and UK Energy Secretary Phillip Hunt stated that the UK backed Nabucco and assured that Turkmenistan was "a promising partner" for London. All they received the opportunity to contact top managers of Turkmen energy and fuel sector; however, nothing has been reported about concrete results yet.