Export of Natural Gas - The Times Of Central Asia

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Export of Natural Gas

Turkmenistan and Iraq Sign Gas Deal for Seasonal Supply via Iran

On October 19, representatives from Turkmenistan and Iraq signed a significant gas agreement in Baghdad. Under the deal, Iraq will import up to 20 million cubic meters of gas daily, with deliveries routed through Iran via a swap arrangement. The Iraqi government has expressed its intention to begin implementing the contract soon. The contract shows that Turkmenistan delivers 10 million cubic meters of fuel to Iraq in winter and 20 million cubic meters in summer. Iraqi Electricity Minister Ali Fadel noted that the contract compensates for the same amount of gas in the event of supply problems. Iraq faces severe energy shortages and unstable supplies from Iran. Problems include its debt and difficulties making payments to Iran, which is under US sanctions. Supply from Turkmenistan is expected to moderate this dynamic. In parallel, Iraq plans to sign contracts with other suppliers and invest in its gas projects. Turkmenistan is also China's gas supplier and was the largest supplier to China in the first half of 2024, exporting gas worth $5.67 billion. During a recent visit to Iran, Gurbanguly Berdimuhamedov, the former president of Turkmenistan and current chairman of the People’s Council (Halk Maslahaty), announced plans to increase gas supplies to Iran to 40 billion cubic meters annually, further solidifying Turkmenistan’s role as a major energy provider in the region.

Export of Natural Gas

Work Begins on Afghan Section of the TAPI Gas Pipeline

Turkmenistan and Afghanistan have now begun construction of the Afghan section of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. To mark the launch of work on the pipeline’s Serhetabat-Herat section, Chairman of the Halk Maslahaty (People’s Council) of Turkmenistan, Gurbanguly Berdimuhamedov, and Mullah Mohammad Hassan Akhund, the Prime Minister of the Taliban-led Afghan government, attended a ceremony at a checkpoint on the Turkmen-Afghan border on September 11. The staged installation of the TAPI pipeline, already completed in Turkmenistan, will eventually transfer 33 billion cubic meters of Turkmen natural gas annually to Afghanistan, Pakistan, and India. At an estimated cost of $10 billion, the TAPI pipeline will span 1,814 kilometers. With 816 kilometers running through Afghanistan, the project will meet the country's gas needs, generating around $450 million in annual transit fees, before continuing on to Quetta and Multan in Pakistan and Fazilka in India. Gas-rich Turkmenistan currently exports natural gas to China and Russia but once completed, the TAPI project will enable the country to diversify its export routes and help realize far-reaching plans to transport its gas across the Caspian Sea to Azerbaijan, Turkey, and Europe. Mullah Mohammad Hassan Akhund stated that the commencement of work on the TAPI project on Afghan soil would strengthen relations between Afghanistan and Turkmenistan, whilst speaking from Ashgabat via videoconferencing, Turkmenistan President Serdar Berdimuhamedov, announced, "The commencement of the TAPI project [on the Afghan territory] and other projects is beneficial not only for Afghanistan but also for the countries in the region." In addition to TAPI, the ceremony opened a 177-meter-long railway bridge at the Turkmen-Afghan border on Serhetabat-Turgundi railroad, launched the construction of the Serhetabat-Herat (Afghanistan) fiber-optic communication line, a warehouse complex in the dry port of the Turgundi railway station at the Turkmen-Afghan border, and the Turgundi-Sanabar section of the Turgundi-Herat railway. The event also marked the commission of the Nur-el-Jahad power plant in Afghanistan's Herat province, as part of the first phase of the Turkmenistan-Afghanistan-Pakistan (TAP) power transmission line project.

Natural gas

Russia’s Gazprom Doubles Gas Supply to Central Asia

As reported by TASS, the head of Gazprom, Alexey Miller, announced that from January to August 2024, the company doubled its gas supply to Central Asia. According to Miller, the rapid economic and social development of the republics has opened up significant new opportunities for Gazprom, with gas supplies to Uzbekistan now at the highest possible level. "For example, the gas supply applications we submit for Uzbekistan are currently being fulfilled through the Central Asia Center gas pipeline at the maximum technical capacity, equivalent to the levels used during the winter season. This is the same level of supply we provided to Uzbekistan last winter when they experienced unusually cold weather,” stated Miller. Citing the fact that Kyrgyzstan’s gasification rate has doubled and continues to grow, he explained, “A lot of work has been done to reconstruct the gas transportation system of Kyrgyzstan. New gas transportation facilities have been built. But what is also important is Gazprom Kyrgyzstan has implemented socially significant projects in Kyrgyzstan, as is customary at Gazprom.” The Times of Central Asia previously reported that in June, Gazprom signed agreements for gas supplies to Kyrgyzstan and with Kazakhstan on the transit of Russian gas in the direction of Uzbekistan and Kyrgyzstan for the period 2025-2040. To ensure transit, a specially designated route based on the Central Asia–Center gas pipeline system will be expanded and implemented. In June 2023, Uzbekistan signed a two-year gas purchase agreement with Gazprom. Daily supplies amount to 9 million cubic meters, and annual supplies amount to almost 2.8 billion cubic meters. Supplies under this agreement began on October 7, 2023.

Oil and Gas

Turkmenistan and Iran to Expand Cooperation in Natural Gas and Transport

On August 28, the chairman of the Halk Maslahaty (People’s Council) of Turkmenistan, the country's former president Gurbanguly Berdimuhamedov, visited Iran and held talks with the Iranian president Masoud Pezeshkian. Iran’s Press TV news agency quoted Pezeshkian as describing four memorandums of understanding signed during Berdimuhamedov’s visit as “strategic,” saying that a document signed between Iran's state gas companies and Turkmenistan will turn Iran into a regional gas transfer hub. No details of the document have been released. Turkmen media reported that Gurbanguly Berdimuhamedov proposed implementing joint projects with Iranian companies to increase the volume of gas supply to Iran to 40 billion cubic meters per year. The Turkmen side also reported that the talks in Tehran discussed exporting Turkmen electricity to Iran. Concerning cooperation in the transport sector, Berdimuhamedov urged increasing cargo transportation along the Kazakhstan-Turkmenistan-Iran railway route, while the Iranian president proposed increasing cargo flows along the Armenia-Iran-Turkmenistan-Kazakhstan route. Turkmenistan and Iran have agreed to start negotiations for a comprehensive deal on transportation issues. The talks, expected to kick off next month, will be part of an intergovernmental committee chaired by Iran’s transportation minister.

Oil and Gas

Turkmenistan Surpasses Russia in Gas Exports to China

Turkmenistan now ranks ahead of Russia in terms of revenue from gas supplies to China. It is being reported that the country became the largest gas supplier to China in the first half of 2024, exporting gas worth $5.67 billion. Russia is now in second place with a trade of $4.69 billion. At the same time, the chairman of the Halk Maslahaty (People’s Council) of Turkmenistan, the former president Gurbanguly Berdimuhamedov, said during his recent visit to Iran that Turkmenistan plans to increase the volume of gas supplies to Iran to 40 billion cubic meters per year. Two gas compressor stations and a 125-kilometer-long gas pipeline are being planned in Turkmenistan. This will allow Iran to supply additional volumes to the “Çaloýuk” gas measuring station. In addition, Turkmen gas will soon be exported to Iraq and Turkey under the SWAP scheme. Although many countries are interested in Turkmenistan’s gas, the nation still struggles to organize an adequate supply to the domestic market.

Oil and Gas

Turkmenistan and Iran Sign Natural Gas Swap Deal

From 1-3 July, Turkmenistan and Iran engaged in negotiations on the supply of natural gas. Reporting on the meeting in Ashgabat, Turkmenistan’s Foreign Ministry announced that a contract had been signed for the purchase and sale of natural gas of up to 10 billion cubic meters per year, to be supplied by Turkmenistan to Iraq through the territory of Iran under a swap scheme. According to the ministry’s statement, to accommodate increased supplies of gas, Iranian companies will also build a new 125-kilometer pipeline and three gas compressor stations in Turkmenistan. Under the new contract, the volume of Turkmen gas supplied to Iran along the Dovletabad – Sarahs – Hangeran route and through the Chaloyuk gas measuring station, will rise to 40 billion cubic meters per year. Despite being home to the world's second-largest natural gas reserves, Iran has experienced chronic natural gas shortages during the winter months, and rising domestic demand has limited the country’s ability to export gas. As a result of the gas swap with Turkmenistan, Iran will be able to meet its gas export commitments. Turkmenistan has the world’s fourth-largest proven natural gas reserves, but due to its geographical location and geopolitical environment, has faced difficulties in finding export markets for its gas. Today, China is the main buyer of Turkmen natural gas.