The future of Turkmenistan’s crucial gas exports to China faces a complex intersection of growing Chinese demand and increasing global supply competition, according to Tianshi Huang, Senior Principal Analyst for China Gas Research at S&P Global Insights.
Numerous factors can influence the potential growth of Turkmenistan’s gas exports to China, including upstream supply capacity and stability, pricing, and most importantly, how China’s gas demand will evolve, the speaker said.
China’s Demand to Peak in Late 2030s, Creating Opportunity
According to S&P Global’s latest long-term outlook, China’s total gas demand is projected to peak in the late 2030s at approximately 620 Bcm (billion cubic meters). This trajectory involves substantial growth, with demand expected to increase by roughly 80 Bcm every five years leading up to that peak.
This robust demand growth is driven by several key factors:
- Coal-to-gas switch in industrial sector, which is anticipated to stimulate greater gas demand.
- Pipeline buildout connects more users to the gas grid, thereby facilitating the gasification of northwestern regions in China with Turkmenistan’s gas.
- The shift from diesel to LNG in heavy-duty trucks, enabling increased gas consumption in the transportation sector.
Huang noted that based on this anticipated growth, and considering existing term supply contracts (both pipeline and LNG), China will still need to secure new supplies to meet rising demand. This presents a clear opportunity for increased imports, including Turkmen pipeline gas.
Supply Side Challenges: The Russian Factor and LNG Prices
Despite the demand outlook, Turkmenistan faces significant competition from potential new pipeline and LNG supplies.
“On the supply side, gas imports from Turkmenistan are facing competition from potential new supplies, such as the Power of Siberia-2 (POS-2) project”, the experts stressed.
Russian media reported the signing of a memorandum (MOU) between Russia, China, and Mongolia for POS-2, which is expected to supply 50 Bcm of Russian gas per year for 30 years (after transiting Mongolia). Huang cautioned that while an MOU exists, it is not a binding Sales and Purchase Agreement (SPA), and many variables remain.
Furthermore, PJSC Gazprom reportedly reached a commercial agreement with CNPC to increase supplies via the existing Power of Siberia-1 (POS-1) from 38 Bcm to 44 Bcm per year, and the Far East route from 10 Bcm to 12 Bcm per year starting in 2031.
If all new contracts are finalized, the new deals will eventually bring total piped gas supply from Russia to China to 106 Bcm/y. The potential new supply from Russia will put pressure on other gas supplies entering China, according to Tianshi Huang.
On the global front, a substantial amount of new LNG liquefaction capacity is expected to come online in the late 2020s. S&P Global forecasts that the global LNG market will experience a period of low prices from the late 2020s to the early 2030s, further influencing China’s appetite for competing Turkmen gas supplies.
At last, the way Chinese demand grows and what supply mix we end up with will depend on multiple factors including policy, cost or affordability level, and political considerations. There are lots of uncertainties that could impact China’s gas demand. Therefore, when China considers new gas import options, several key issues need to be carefully evaluated, including the total volume of contracts, the duration of contracts, and the flexibility of supply, stressed Tianshi Huang. ///nCa, 23 October 2025