...

Status of Turkmen gas transportation projects as of December 2013

Oil&Gas Materials 27 December 2013 19:04

Ashgabat, Turkmenistan, Dec.27
By Huseyn Hasanov- Trend:

According to a British Petroleum report, Turkmenistan ranks fourth in the world for natural gas reserves after Russia, Iran and Qatar. In its report on the global energy sector-2013, BP said that Turkmenistan's proven gas reserves in 2012 totaled 17.5 trillion cubic meters, exceeding estimates for 2011 in the amount of 24.3 trillion cubic meters.

Turkmenistan produced some 64.4 billion cubic meters of gas in 2012 compared to 59.5 billion cubic meters of gas in 2011, which is 7.8 percent more than in 2011.

Turkmenistan's share of global natural gas production was 1.9 percent. Gas consumption in the country totaled 23.3 billion cubic meters in 2012, which is 7.1 percent more than the previous year.

Currently, Turkmenistan has opportunities to export natural gas to China, Iran and Russia.

The largest fields are located in Mary province in the east of the country at Southern Yoloten - Osman (they were merged and renamed Galkynysh) and Yashlar with total resources estimated by local geologists and British GCA at 26.2 trillion cubic meters.

Turkmen Ministry of Oil and Gas Industry and Mineral Resources said in November 2013 that the geological exploration work that is being carried out shows the existence of more gas reserves at Galkynysh, making it the second largest field in the world after the South Pars.

The current status of gas transportation projects in Turkmenistan:

Discussed projects

*Turkmenistan sells its gas at the border.

The projected gas pipelines in Turkmenistan are selling additional product to Russia through the Caspian Sea, via Kazakhstan, Europe via the Trans-Caspian gas pipeline through Azerbaijan and India through the Trans-Afghanistan gas pipeline.
Russia

Caspian Gas Pipeline (Turkmenistan-Kazakhstan-Russia)

The Caspian gas pipeline's designed capacity is estimated at 30 billion cubic meters per year.

Gazprom may become the buyer. The company signed an agreement with Turkmenistan for supplies over the course of 25 years in 2003.

In a political decision, the presidents of Russia, Kazakhstan and Turkmenistan signed an agreement on its construction in May 2007.

Project status

The preparation of a feasibility study has been suspended due to geo-economic changes.
High-ranking representatives of Russia stated earlier that an agreement was reached to freeze the project. In turn, Turkmenistan stated that no negotiations were held.
Europe

Trans-Caspian gas pipeline (Turkmenistan-Azerbaijan-Europe)

The design capacity of the nearly 300 kilometres long Trans-Caspian pipeline running through the Caspian Sea between Turkmenistan and Azerbaijan is linked to the demand for Turkmen gas to Europe.

Trans-Caspian project can be implemented within several projects - Nabucco, Trans-Anatolian gas pipeline (TANAP - which includes Turkey and Azerbaijan) and AGRI (Azerbaijan-Georgia-Romania Interconnector).

Turkmen gas goes to the European market through the Caspian Sea and Azerbaijan.

AGRI

Turkmenistan demonstrated interest in the Azerbaijan-Georgia-Romania Interconnector (AGRI) project which includes supply of liquefied Caspian gas to Romania via the Black Sea coast of Georgia. The project's cost will depend on the design capacity and can vary from 1.2 billion to 4.5 billion euros. It is necessary to construct a separate gas pipeline branch through the seabed of the Caspian Sea up to Azerbaijan's coast or to supply liquefied natural gas with tankers across the sea, in order to supply this project with Turkmen gas.

TANAP

Azerbaijan and Turkey signed an intergovernmental agreement on June 26, 2012 to create the Trans-Anatolian gas pipeline project (TANAP). The initial capacity of the pipeline is expected to reach 16 billion cubic meters of gas per year. About six billion cubic meters of gas will be delivered to Turkey and the remaining will be transported to Europe.

The possibility of Turkmenistan's participation as a medium-term gas supplier was discussed in Ashgabat more than a year ago at a meeting of energy bodies of Azerbaijan, Turkey, Turkmenistan and the European Commissioner for Energy. Ashgabat expressed willingness to supply this project with its fuel, recalling that it sells the fuel at the border.

Trans-Caspian project status

There is no direct agreement on the implementation of the Trans-Caspian gas pipeline yet. However, in September 2011 the European Union issued a mandate to start negotiations on an agreement between the EU, Azerbaijan and Turkmenistan on the Trans-Caspian project. Negotiations are underway.

Ashgabat believes that consent of the parties (Turkmenistan and Azerbaijan), territory of which is covered by the project, is enough to construct the pipeline through the seabed of the Caspian Sea, legal status of which has not been yet determined. Azerbaijan expressed its willingness to provide its territory, transit opportunities and infrastructure to implement the project. Representatives of the State Oil Company of Azerbaijan (SOCAR) made this statement.

Turkmenistan announced its willingness to provide Europe with 40 billion cubic meters of gas per year, 10 billion of which can be provided by Petronas operating in the Turkmen section of the Caspian Sea. The remaining volume may be provided by an 800 km long East-West gas pipeline, which is being constructed. The pipeline stretches from the Galkynysh field and ends at the Caspian Sea coast.

Turkmenistan and the EU will hold talks in Ashgabat before late 2013 or in early 2014. The talks will cover the implementation of the Trans-Caspian project. Here the matter rests in a document that allows initiating an independent environmental assessment. The European Energy Commissioner Günther Oettinger is planning to visit Ashgabat for this purpose.

India

TAPI (Turkmenistan-Afghanistan-Pakistan-India)

The design capacity of the TAPI is 33 billion cubic meters of natural gas per year.

The estimated length reaches 1,735 kilometers. It is expected that the pipeline will extend from the largest gas field in Turkmenistan 'Galkhynysh' through the Afghan cities of Herat and Kandagar to the Fazilka settlement on the Pakistani-Indian border.

Buyers are Pakitani and Indian gas companies. Bangladesh wants to join TAPI as a buyer of raw material.

Project status

The basic document to advance the TAPI project is an inter-state agreement to start the implementation of TAPI signed in Ashgabat in 2010. Instability in transit to Afghanistan remains a serious obstacle, but Kabul states that it can ensure the safety of the route.
TAPI is currently at an important stage of development.

Agreements were signed regarding the sale of gas between the Turkmen government, the Indian GAIL Ltd. and the State Gas Systems of Pakistan in May 2012. A corresponding agreement was signed with the Afghan Gas Corporation in July, 2013. In November 2013 a Service Agreement on TAPI was signed with the transactional advisor - Asian Development Bank.

At this stage, work is underway on formation of a TAPI consortium that will provide financing and construction of the energy highway.

It was reported that Chevron, Exxon Mobil, BP, BG Group, RWE, and Petronas expressed intentions to participate in the project. According to Indian sources, the Shell Company is also interested in the project. South Korean Korea Gas Corporation (Kogas) voiced interest in the TAPI as well.

Russia showed a strong interest in the project, its implementation is also supported by the U.S., which is against a similar project from Iran to Pakistan.

Existing routes:

CIS

Central Asia- Center Gas Pipeline (Turkmenistan-Uzbekistan-Kazakhstan-Russia)
The Central Asia-Center gas pipeline was put into operation in late 1960 with a throughput capacity of 80 billion cubic meters per year. Over time, the pipeline's power was reduced to 40-50 billion cubic meters per year. Reconstruction is necessary.

Gazprom, the company buying the gas, signed an agreement with Turkmenistan for gas supplies for a 25 year span in 2003.

Project status

At present, the Central Asia-Center Pipeline does not operate at full capacity. Russia suspended Turkmen gas imports in April 2009 due to an accident. Technical issues have been resolved, but global recession forced Russia to reduce its purchases to 10-11 billion cubic meters of gas since 2010, four times less than in 2008.

In 2012 it became possible to supply Russia with raw materials not only from the eastern fields of Turkmenistan, but also from the west, thanks to the construction of a connecting branch from the Caspian Sea coast, where Petronas can begin industrial gas production on the offshore block.

Russian company Gazprom announced in September 2013 that it expects to revise the terms of gas purchase in Turkmenistan as a price formula for purchasing Turkmen gas was determined at the peak of a European price rise. Since then the formula for selling Gazprom's gas to Europe has been changed.

China

Trans-Asian gas pipeline (Turkmenistan- China)

The Turkmenistan -Uzbekistan -Kazakhstan-China gas pipeline was put into operation in 2009. Its design capacity is 40 billion cubic meters per year (two branches are completed, the third one is under construction).

An agreement on increasing the procurement by 25 billion cubic meters was signed in Beijing in 2011. There is need to build a fourth branch.

Chinese CNPC is a buyer of gas. It concluded an agreement on supplies with Turkmenistan in 2006.

Besides Bagtyyarlyk field developed by China's CNPC, Galkynysh field is a source of raw materials. It is being developed with a multi-billion loan from the Chinese government.

Project status

After the summit talks in Ashgabat in September 2013, China and Turkmenistan agreed on the fourth branch of the Turkmenistan-China gas pipeline via a new route - through Uzbekistan, Tajikistan and Kyrgyzstan. The gas pipeline will be commissioned in 2016 and its capacity will hit 25 billion cubic meters of gas per year.

According to the plans, all four branches of the Turkmenistan-China gas pipeline will reach the full contracted capacity of 65 billion cubic meters of gas per year by 2020. In December 2013, Kyrgyzstan and China signed an agreement on gas pipeline construction from Turkmenistan.

Iran

Korpeje-Kurt-Kui Pipeline (Turkmenistan-Iran)

The gas pipeline in the territories of Turkmenistan and Iran was commissioned in December 1995. Today, its capacity has reached 8 billion cubic meters per year.
Project status

Its potential capacity can be increased to 14 billion cubic meters. The National Iranian Gas Export Company is the buyer.

Dovletabad-Sangbast Pipeline (Turkmenistan-Iran)

The Serahs- Dovletabad Pipeline to the Iranian border, with a capacity of up to 6 billion cubic meters a year was commissioned in late December 2009. The accompanying branch in Iran from Serahs to Hangeran through Sangbast was opened in November 2010.

Project status

The buyer of gas is the National Iranian Gas Export Company. There is a potential to increase the pipeline's capacity twofold.

The Keymir gas compressor station was put into operation in December 2013.
If neccesary, it will be able to supply fuel to the Turkmenistan-Iran pipeline through a complex gas preparation unit at the Akpatlauk field, located in close proximity to Keymir.

Translated by L.Z., E.A., M.L., N.H.

Edited by C.N.

Tags:
Latest

Latest