Oil and Gas - The Times Of Central Asia

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Russia Looking to Export Gas to China via Kazakhstan

Russia continues to try to reorient its natural gas exports from Europe to Asia and is planning a new pipeline route to China that would pass through Kazakhstan. Kazakhstan stands to benefit not only from transit fees, but could also import some Russia gas for regions in northeastern Kazakhstan that are desperately in need of more energy sources. The Russian plans are bad news for Turkmenistan as China is Turkmenistan’s main gas customer and Turkmen authorities were hoping to sell China even more gas. On November 15, Russian Deputy Prime Minister Aleksandr Novak mentioned the pipeline plan on the sidelines of a Chinese-Russian forum in Kazan, Russia. Novak said such a project is still only being discussed, but Russian media outlet Kommersant wrote on November 18 that there are already three options for the pipeline. All three possibilities pass though northeastern Kazakhstan, but Kazakhstan’s level of participation in the pipeline is different in each variation. One of the projects would require Kazakhstan to build a pipeline for gasification of the northeastern Pavlodar, Abai, and Karaganda provinces. A second proposal would include only the Abai and Zhetysu provinces. Russian gas giant Gazprom’s financial obligation also changes depending on the pipeline project selected. The most expensive option for Gazprom would cost more than $10 billion to construct and would not operate at full capacity until 2034. All versions foresee at least 35 billion cubic meters of Russian gas (bcm) shipped via the pipeline with Kazakhstan receiving some 10 bcm, which would greatly alleviate recent power shortages in northeastern Kazakhstan. Despite Novak saying the pipeline project was only being discussed, Kazakhstan and Russia appear well along in their planning. In early May, Kazakh Ambassador to Russia Duaren Abayev gave an interview to Russia’s TASS news agency and mentioned there was a “roadmap” for supplying 35 bcm of gas to China via Kazakhstan. Russia already exports gas to China via the “Sila Sibiri” (Power of Siberia) pipeline and expects that in 2024 the pipeline will for the first time reach its full capacity of 38 bcm. Construction of Sila Sibiri-2 with a planned capacity of some 50 bcm has been delayed due to China’s reluctance to loan Russia money for construction, differences over price, and China’s increasing purchases of liquefied natural gas (LNG). Novak commented on Sila Sibiri-2, saying the pipeline project involving Kazakhstan was separate and the Russian government will continue to negotiate with China about construction of Sila Sibiri-2. Russia is seeking to replace its former main customer, the European Union. Prior to the Kremlin launching its full-scale war on Ukraine in February 2022, the EU was buying between 150-160 bcm of Russian gas annually. The EU sharply cut back on Russian gas imports in response to the invasion of Ukraine and in 2023 imported less than 43 bcm. Russia’s pivot to Asia for gas exports targets the Chinese market, but Gazprom is looking to take any possible Asian customers and has found some in Central Asia. Russia’s surge into the Asian...

Gas Pipelines Iraq Oil and Gas Iran

After Long Search, Turkmenistan Finally Finds a New Gas Customer – Iraq

Turkmenistan is reconfiguring its natural gas export options. Despite holding the world’s fourth largest gas reserves, Turkmenistan is exporting less of its gas today than it was 16 years ago. The big gas pipeline projects conceived nearly 30 years ago – a trans-Afghan pipeline to supply gas to Pakistan and India and a trans-Caspian pipeline to send gas to Europe - remain unfeasible for political reasons. Russia has been a leading customer for Turkmen gas for most of those three decades, but now Russia is competing for some of the same buyers as Turkmenistan. Stymied in its search for new markets at seemingly every turn, Turkmenistan is now planning on selling gas to Iraq, via a swap arrangement with Iran that includes bring Iranian companies to Turkmenistan to construct a new pipeline. Running Out of Options Turkmenistan is always looking for new gas customers. Iraq was never a potential gas buyer until recently, and in fact, the defunct Nabucco gas pipeline project of some 15 years ago considered Iraq to be a possible supplier of gas for Europe. Turkmenistan’s deal with Iraq appears to be the only deal possible at the moment, and it is an interesting arrangement. The two countries are not connected by any pipelines, so Turkmenistan will ship up to 10 bcm of gas to Iran, and Iran will send 10 bcm of its gas to Iraq. Turkmenistan signed what was described as a “binding agreement” for gas shipments after Iraq agreed to “an advance payment scheme and tax concessions.” In recent years, about 40% of Iraq’s gas imports came from Iran. After some 20 years of conflict, Iraq’s gas industry is still recovering, and gas imports are needed to operate the country’s power plants. However, sanctions on Iran made it difficult for Iraq to make payments for that gas. A Rocky Gas History There are already two gas pipelines connecting Turkmenistan’s gas fields to northern Iran. At the end of December 1997, the 200-kilometer Korpeje-Kurdkui pipeline with a capacity of some 8 bcm of gas was launched. In January 2010, the Dauletabad-Sarakhs-Khangiran pipeline with a capacity of some 12 bcm started operation. Turkmenistan was never close to shipping the 20 bcm combined capacity. Exports ranged from 6-8 bcm annually for years. Iran usually paid for its Turkmen gas in barter, sending a variety of goods, from food to engineering goods and services to Turkmenistan. In late 2016, a dispute developed between Turkmenistan and Iran over gas. Turkmenistan claimed Iran owed some $2 billion for gas supplies received in the winter of 2007-2008. Iran responded that Turkmenistan was inflating the price. The winter of 2007-2008 was especially cold causing severe gas shortages in 20 Iranian provinces. One Iranian media outlet reported on December 31, 2016, “Turkmenistan pounced on the occasion to demand a nine-fold hike which yanked the price up to $360 from $40 for every 1,000 cubic meters of gas.” On January 1, 2017, Turkmenistan halted gas supplies to Iran. The two countries took their...

Afghanistan Economy Oil Oil and Gas Environmental Awareness Ecology Water Security

Afghanistan to Boost Oil Production in the Amu Darya Basin

Afghanistan plans to launch 25 new oil wells in the Amu Darya basin, increasing daily oil production to 3,000 tons. Hamdullah Fitrat, the deputy spokesman of the Islamic Emirate of Afghanistan, shared that there are currently 24 active wells in this field, from which 1,300 tons of oil are extracted daily. According to Fitrat: "The Ministry of Mines and Petroleum plans to activate 25 more wells by the end of this year, of which 18 will be newly drilled, two will be exploratory wells, and five will be rehabilitated.” Economic experts stress that officials should carefully plan new well drilling and attract investors to process the extracted oil. Economic expert Abdul Zahoor Madaber stated that Afghanistan has abundant natural resources but lacks modern machinery to process them, and cooperation with other countries is needed to import this equipment. Mohammad Asif Stanekzai, another economic expert, added: “The production and processing of natural resources can create job opportunities and have a positive impact on reducing inflation in Afghanistan.” According to the Ministry of Mines and Petroleum, only 10% of Afghanistan’s oil needs are currently met from domestic production. The Amu Darya is a vital river for Central Asian countries. While 72-73% of its water originates in Tajikistan, the majority is used by neighboring countries. In April of this year, the countries of Central Asia distributed Amu Darya and Syrdarya water for the summer of 2024. Under the agreed quota, the draw on water from the Amu Darya watershed will be 56 billion cubic meters for the year, with about 40 billion cubic meters used in the April-to-October growing season. As stated in the Interstate Commission for Water Coordination (ICWC) agreement, Uzbekistan will receive 16 billion cubic meters, Turkmenistan will receive 15.5 billion cubic meters, and Tajikistan will receive 6.9 billion cubic meters. The ICWC claims that the total number of irrigated lands in Central Asian countries is 4.3 million hectares in Uzbekistan, 2.5 million hectares in Kazakhstan, 1.9 million hectares in Turkmenistan, 1 million hectares in Kyrgyzstan, and 680,000 hectares in Tajikistan.

Oil and Gas gasoline Exports Shortages

Turkmenistan’s Unexplained Shortage of Gasoline

For months now, areas in eastern Turkmenistan have been facing a severe gasoline shortage. The lack of fuel at the pumps is having a knock-on effect that is raising food prices and shutting down public transportation. Turkmen officials have not acknowledged there is any problem, so the people of the affected regions have no idea why this happening or for how long this situation will continue. Gasoline shortages are not new to Turkmenistan. They have been occurring sporadically in recent years, usually during in late summer when harvesting of crops starts. This latest deficit is unprecedented for Turkmenistan in its duration and severity. Long lines and purchase limits By late June, there reports from Lebap and Mary provinces about lines of cars of waiting at petrol stations. Often there was not enough gasoline for everyone. By mid-July, filling stations in at least five districts and several of the big cities in Lebap Province were often completely out of higher-grade gasoline – A92 and A95. Before the end of July, Lebap authorities imposed a 10-liter limit per customer, per day on gasoline purchases. At the start of July there were areas in the northeastern Dashoguz Province that were totally without gasoline, even the cheapest and most environmentally harmful A-80 grade (which is banned in many countries, including Kyrgyzstan and Tajikistan) was unavailable. In Mary Province, A-92 and A-95 gasoline ran out in July and by early August authorities had limited purchases of A-80 to 20 liters per customer, and even that was unavailable in many areas of the province. In October, Radio Free Europe’s Turkmen service, known locally as Azatlyk, posted a video of a line of vehicles some three kilometers long outside one of the few filling stations operating along the Turkmenabad-Mary highway. Azatlyk’s sources in the region said there were similar lines at filling stations throughout the province and in the provincial capital Turkmenabad. Some people are reportedly arriving at filling stations at 4am to get a place in line as close to the pumps as possible when the stations open. In Mary Province, some car owners said they were phoning family members to bring them food and water while they waited in line. Prices going up at the pumps and other areas Turkmenistan has some of the least expensive gasoline in the world with an average of $0.428 per liter, roughly a third of the world average of $1.30 per liter. The official rate of Turkmenistan’s national currency, the manat, is 3.5 to $1. The state regulated cost of one liter of gasoline is 1.15 manat for A-80, 1.35 for A-92, 1.5 for A-95, and 1 manat for diesel. There have been incidents where filling station employees have been illegally selling gasoline at 5-6 manat per liter to those who can afford it. The shortage is having an effect on public transportation. Most buses are assigned to bringing people to and from the cotton fields once harvest starts toward the end of August or early September...

Price Economy gasoline price Motor fuel Gas and diesel Oil and Gas

Turkmenistan Among Ten Countries With Cheapest Gasoline

According to the Global Petrol Prices portal, the average price of gasoline worldwide is $1.21 per liter as of September 30, 2024. “However, there is a substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices,” the report explains. Iran, Libya, and Venezuela have the lowest diesel fuel prices. Singapore, Israel, Finland, Albania, Switzerland, Liechtenstein, Iceland, the Central African Republic, Monaco, and Hong Kong have the highest prices. The highest price is noted in Hong Kong, where one liter of gasoline is $3,279. Turkmenistan has the lowest oil prices among Central Asian countries. One liter of gasoline costs $0.429, making it among the top 10 countries in terms of low prices. In Kazakhstan, the price of one liter of gasoline is $0.508. In Kyrgyzstan, it is slightly higher—$0.880. The most expensive price in the region is in Uzbekistan, where the price of one liter of gasoline is $0.983. There is no information about the price of gasoline in Tajikistan.

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Tajikistan and Russia Explore Joint Oil and Gas Development Opportunities

Tajikistan and Russia are studying the possibility of jointly exploiting oil and gas fields in Tajikistan. At the intergovernmental commission meeting held in Dushanbe, Tajikistan's Prime Minister, Kohir Rasulzoda, and the Deputy Chairman of the Russian Government, Marat Khusnullin, discussed the development of mines. “We have given the Russian side a list of promising oil and gas fields in Tajikistan for joint development. We propose to continue working on finding common ground to implement a mutually beneficial project in this area,” Rasulzoda said. He said the Russian side's opinions were considered when making this decision. The Statistical Agency of Tajikistan provides information that in 2023, about 18,000 tons of oil were produced in the country, which isn’t enough to supply oil refineries. In this regard, oil products are imported to Tajikistan. Russia, the leading supplier, provides gasoline and diesel to Tajikistan without customs fees.