Hydrocarbon Development Policy of Turkmenistan

nCa Report

Ashgabat, 15 March 2008 (nCa) --- Under the current hydrocarbon development policy Turkmenistan is actively supporting three new gas export pipelines.

The long-dormant Trans-Caspian is not one of them but it has not been removed from the list of future possibilities.

Turkmenistan-China pipeline, Caspian Coastal Pipeline (CCP), and Trans-Afghan pipeline (TAPI) are at the centre of the diversification plan of Turkmenistan.

Audit of some hydrocarbon deposits and gasification of rural areas are also among the priority items.

In a meeting Friday with the top executives of the fuel and energy sector, President Berdymuhamedov defined the current priorities of the hydrocarbon sector of Turkmenistan.

Flexibility of Approach

Berdymuhamedov said that growing demand of energy resources in the world markets necessitates a flexible approach from all sides. Everyone needs to follow partnership obligations for the sake of international cooperation, he said.

The Turkmen president said that in its role as a global heavyweight in energy resources, Turkmenistan will shape its policies according to the national interests and the interests of its partners.

While the basic goal of the energy development policy of Turkmenistan is to bring maximum benefit to the people of Turkmenistan there is equal emphasis on using the hydrocarbon potential for the benefit of the mankind.

Audit of Hydrocarbon Resources

After several rounds of negotiations Turkmenistan has picked the British company Gaffney Cline for audit of hydrocarbon reserves in Osman-South Yoloton zone. Gaffney Cline has already audited some reserves in central and eastern Turkmenistan.

According to Turkmen experts, Osman-South Yoloton is the fourth largest gas reserve in the world.

Hydrocarbon Development Programme

The overall strategy for development of energy resources and their integration into the global energy systems is defined in the “Programme for Development of Oil and Gas Industry of Turkmenistan up to 2030.”

Caspian Coastal Pipeline

CCP is a joint project of Turkmenistan, Kazakhstan and Russia. Considerable progress has been made on this project. All the three countries have agreed on the route of the pipeline.

Kazakhstan and Turkmenistan are discussing some technical question ahead of the start of the construction work.

Turkmenistan-China Pipeline

Turkmenistan-China pipeline – China calls it Central Asia Pipeline – is scheduled to come into operation in January 2009. China and Turkmenistan are fully engaged at all levels to make sure that no bureaucratic hurdles reduce the speed of the construction work.

Bagtiyarlyk cluster at the right bank of Amudarya River will mainly feed the Turkmenistan-China pipe. Total length up to the Chinese border would be 1818 kilometers, of which 525 kilometers would pass through the territory of Uzbekistan and 1293 kilometers through Kazakhstan.

Production wells are being drilled at Samandepe in Bagtiyarlyk area.

Gas storage, processing, compression and metering facilities are envisaged in the comprehensive project plans.

Trans Afghan Pipeline

The next meeting of the steering committee of TAP will be held in April 2008 in Islamabad. The pipe capacity would be 33 billion cubic meters.

ADB financed the feasibility study and lends full support to the project.

Trans-Caspian Pipeline

The Turkmen president during the Friday meeting that Turkmenistan remains committed to pursuit of multiple routes for export of its energy resources. The purely pragmatic approach, he said, envisions Turkmenistan-China, Caspian Coastal and Trans-Afghan pipelines.

Trans-Caspian route has not been removed from the agenda, he added.

Berdymuhamedov also said that Turkmenistan and Azerbaijan had agreed to hold a joint conference on practical partnership in the oil and gas sector.

Central Asia-Centre Pipeline

As Turkmenistan pursues new pipelines, it is paying full attention to modernization and upgrading of Central Asia-Centre pipeline, the existing network of pipes for export of central Asian gas in the northern direction. The network is being modernized under a quadrilateral agreement between Turkmenistan, Kazakhstan, Uzbekistan and Russia.

Gasification of Rural Areas

Turkmenistan is concentrating on gasification of all the rural areas. Under the national development programme for rural areas, gas is being provided to far flung settlements.

In addition, a 409-km pipeline will be paid from Gumdag to Ashgabat to meet the rising gas demands of the capital.