Turkmenistan. Diversifying export routes. Ashgabat’s strategy.

27 Sep 2010

Ashgabat continues its policy of diversifying export routes for its raw materials. "This station will make it possible to increase supplies of gas to the Turkmenistan-China pipeline", Turkmenistan President Gurbanguly Berdymukhammedov said, speaking at the Bagtyayrlyk launch ceremony. "It can pump 60 million cubic meters of gas a day", he added. China is set to become the largest buyer of gas from Turkmenistan over the coming years as a pipeline linking the two countries, through Uzbekistan and Kazakhstan, reaches full capacity. Deliveries began earlier this year and are expected to hit 40 billion cubic meters in 2015. The opening came as China and Russia signed a raft of energy deals, including on increasing natural gas exports to Beijing. Gazprom, Russia's state-controlled gas producer, said it expects to be able to supply China with 30 billion cubic meters of gas annually starting in late 2015.

"In addition to supplying Russia, China and Iran, we are also taking concrete measures to accelerate progress in the construction of the Turkmenistan-Afghanistan-Pakistan and India pipeline in concert with the member countries of this large-scale project," Berdymukhammedov said. At the end of August Turkmenistan and Afghanistan signed an agreement on construction of the Trans-Afghanistan (TAPI) gas pipeline for the transfer of Turkmen gas to Pakistan and India which have expressed interest in buying up to 70 billion cubic metres annually, by the end of this year. The TAPI project, first put forward in 1995, was promoted by the country's late leader, Saparmurat Niyazov, in the early 2000s. It secured strong support from Washington after a U.S.-led offensive ended the Taliban's five-year rule over Afghanistan in 2001. Turkmenistan has previously estimated the cost of the project at $3.3 billion. Natural gas to fill the pipeline could be drawn from the massive South Yolotan deposit, currently under development, and the existing Dovletabad field.The planned pipeline would have initial capacity for 33 billion cubic metres a year and would run for nearly 2,000 km (1,250 miles), including 735 km across Afghanistan and another 800 km through Pakistan. Despite receiving financing from the Asian Development Bank (ADB) the project, whose route would take it through conflict torn-Helmand and Kandahar in Afghanistan and Quetta in Pakistan, has been held up by security problems.

Earlier, on May 21st, Berdymuhammedov unexpectedly signed a decree stating that companies from Turkmenistan will build an internal East-West gas pipeline allowing the transfer of gas from the biggest deposits in Turkmenistan (Dowlatabad and Yolotan) to the Caspian coast. The East-West pipeline is planned to be around 1000 km long and have a carrying capacity of 30 bn m³ annually, at a cost of between one and one and a half billion US dollars. Construction of the pipeline is to be financed by the Turkmengaz company; it will begin this June and last five years.

Some experts say that this decision is probably motivated by Ashgabat desire to maintain its influence on which direction its gas is exported from the Caspian coast; gas can flow from there to Europe (for example, along the projected trans-Caspian route), to Russia (along the planned Caspian route), or to Iran (along the already existing Korpeje-Kurt Kuy route). By not taking a final decision on which way to export its gas from this new pipeline, Ashgabat can extend and heat up the rivalry between Russia and the West for Turkmenistan’s gas.

Giuseppe D'Amato

See also EuropaRussia February 3rd, 2010.

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