MONTREAL - Turkmenistan
and China have signed a deal making good on
Turkmenistan President Gurbanbuly Berdimuhamedow's
earlier promise to increase his country's natural
gas shipments to China to 65 billion cubic meters
per year (bcm/y).
The new agreement was
signed formally between the two states' respective
state companies Turkmengaz and China National
Petroleum Corp (CNPC). The new quantity is more
than double the 30 bcm/y originally envisioned at
the start of the project in 2007, and more than
half again as much as the 40 bcm/y that had been
agreed in 2008 as an increased level.
announcement represents yet another blow against
Russia's hopes to export up to 68 bcm/y of
Siberian gas to China. Russia's President Vladimir
Putin left Beijing last week after a series of
bilateral meetings in the margin of a Shanghai Cooperation
Organization summit with
no price agreement over the deal. The original
memorandum of understanding between Gazprom and
CNPC was signed back in 2004, but since then China
has diversified its sources of gas imports.
The announcement that Turkmenistan will
increase still further its sales to China comes
days after CNPC, which built and operates the
1,830-kilometer gas pipeline that also passes
through Uzbekistan and Kazakhstan into Xinjiang in
western China, announced that it had received 30
bcm from Turkmenistan since the pipeline began
pumping at the end of 2009.
quantity, Turkmengaz has supplied nearly
two-thirds, and CNPC's subsidiary in the country
has supplied the rest. Slightly over half of the
30 bcm were delivered in 2011, triple the level
from 2010 as volumes began to ramp up according to
A little over one-third of the
total has come from the previously operating
Samantepe and Altyn Asyr fields in the Bagtyyarlyk
cluster, where CNPC is jointly developing new
fields with Turkmengaz. Chinese engineers estimate
that the whole cluster holds a total of 1.6
trillion cubic meters of gas. The report that 10.7
bcm/y came from Samantepe and Altyn Asyr last year
means that the first phase of the development
schedule has been reached.
fields were at the start projected to furnish 13
bcm/y of the original 30 bcm/y contract. The
remaining 17 bcm/y would come from other fields in
the Bagtyyarlyk cluster that are subject to the
Chinese-Turkmenistani production sharing agreement
signed in July 2007. During the current calendar
year, CNPC is seeking to increase its imports of
gas from Turkmenistani sources to 24.1 bcm.
The balance of this quantity not sourced
from Turkmenistan will come from Uzbekistan, which
this year will join Turkmenistan as an exporter
through the Turkmenistan-China pipeline.
Kazakhstan is also in the queue to join the list,
but for the moment South Kazakhstan province is,
through a pipeline from the northwest of the
country constructed with Chinese assistance,
consuming gas along the route that will later open
to China as volumes of throughput ramps up.
Turkmenistan's new deal with China comes
on top of the pricing and supply agreements signed
last month among partners in the
natural gas pipeline project, a US$7.6 billion
plan that is being supported by the Asian
Development Bank (ADB). The 33 bcm/y of gas for
this pipeline is planned to come from the
Galkynysh field, previously known as Yolotan, one
of the world's biggest.
numerous reports asserted that Bangladesh has now
expressed an interest in joining the TAPI project
and has asked the ADB to help it find a way.
Adding Bangladesh to the pipeline would mean
lengthening the planned 1,700-km pipeline by an
additional 708 km to join up with the country's
national distribution network.
faces a potential gas shortage in the wake of the
failure several years ago to resolve a dispute
with India and Myanmar over maritime boundaries in
the Bay of Bengal (the latter was resolved earlier
this year), but at the same time the ADB evaluates
the country's degree of dependence on natural gas
as an actual threat to energy security.
The development of Turkmenistan's gas
resources in its offshore Caspian Sea sector
meanwhile continues apace as the Malaysian company
Bumi Armada reported that it won a contact to lay
pipelines off the country's coast, signing an
agreement with Momentum Engineering Turkmenistan,
headquartered in Dubai. The company claims to have
"one of only two derrick pipe lay barges in the
landlocked Caspian Sea" and looks forward to
significant experience with Malaysia's energy
sector firms. The Malaysian state oil and gas
company, Petronas, is reported to have invested
$4.5 billion in Turkmenistan as of the end of
2011. Petronas has driven development of a block
in Turkmenistan's offshore that is expected to
produce 5 bcm/y to start, ramping up to 8-10 bcm/y
by the middle of the current decade.
processing for the product of the
Petronas-developed offshore block is being
constructed on Turkmenistan's Caspian Sea coast.
In this sense, the choice of Malaysia's Bumi
Armada to be the pipe layer is less surprising
than it might at first seem. Turkmenistan's state
media reported last year that the gas sourced from
this offshore deposit will be exported but did not
name the end consumer.
Dr Robert M
educated at the Massachusetts Institute of
Technology and The University of Michigan, has
researched and taught at universities in the
United States, Canada, France, Switzerland, and
Russia. Now senior research fellow in the
Institute of European, Russian and Eurasian
Studies, Carleton University, Canada, he also
consults privately in a variety of fields.
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