Oil and Gas - The Times Of Central Asia

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Gas Exports

The Power of Siberia 2 Project and Central Asia’s Gas Bargaining Power

The proposed Power of Siberia 2 (PoS-2) pipeline from Russia to China has re-entered the headlines on the strength of a new memorandum between Gazprom and CNPC. Russia calls the memorandum “legally binding,” but China has avoided the phrase, because the only thing that is legally binding is an agreement to negotiate. The memorandum affirms a design capacity up to 50 billion cubic meters per year (bcm/y), a route via Mongolia, and a total trunk length of roughly 2,600 kilometers (km) on the Russian side before crossing Mongolian territory. Feasibility work has highlighted a 1,420-millimeter (56-inch) pipe diameter, and an indicative cost cited in some trade reporting near $13–14 billion. The political signaling is strong, but pricing terms remain unresolved. For Central Asia, the significance is immediate: even without a final sales contract, the expectation of future Russian volumes tightens China’s negotiating posture with Turkmenistan, Kazakhstan, and Uzbekistan, the three states already connected to China by the Central Asia–China Gas Pipeline (CAGP). Central Asia's Gas Supplies to China China’s westbound import corridor from Central Asia consists today of three parallel pipelines that together provide a nominal capacity of 55 bcm/y (Lines “A” and “B” at 15 bcm/y each, and Line “C” at 25 bcm/y). Construction of the first two lines began in 2008, with operations starting in 2009–2010; Line C entered service in 2014. Line D, planned at 30 bcm/y through Uzbekistan–Tajikistan–Kyrgyzstan to China, has been delayed for years; if completed, it would raise corridor capacity toward 85 bcm/y. Turkmenistan is the anchor supplier. The Oxford Institute for Energy Studies (OIES) estimates its deliveries to China at 32.9 bcm in 2022 (roughly 81% of the country’s gas exports that year), with long-term sales structured on formulas linked to the price of oil. Interfax reports that in the second quarter of 2025, the price for Turkmenistan’s gas fell below $290 per thousand cubic meters (mcm). This figure is consistent with oil-price linkage rather than hub-indexed European benchmarks. Recent industry and regional reporting puts Turkmenistan’s deliveries averaging approximately 35 bcm/y in the mid-2020s. Kazakhstan had committed to supply up to 10 bcm/y, but domestic constraints have kept actual flows lower. S&P Global cites 4.4 bcm in 2022 and 5.86 bcm in 2023, with winter interruptions to protect domestic consumers; of the 29.8 bcm of commercial gas produced in 2023, 19.4 bcm was consumed at home. Uzbekistan’s volumes have been more variable as Tashkent balances domestic demand, imports, and swap operations. Jamestown noted a fall in Uzbek gas export value to China from $1.07 billion in 2022 to $563.5 million in 2023, before a rebound in 2024 and 2025 according to Chinese customs-based press summaries. PoS-2’s Route, Mongolian Gatekeeping, and Central Asian Implications The geography of the route matters for Central Asia. On the Russian side, public summaries describe a corridor from Yamal via Urengoy through Krasnoyarsk and Irkutsk, then across Buryatia toward Kyakhta near the Mongolian border. In Mongolia, official communications stress underground installation across the steppes and local economic benefits, but final...

U.S.-Turkmenistan Relations

Opinion: Gas, Geopolitics, and Realism: U.S.–Turkmenistan Talks Signal Shift

U.S. Secretary of State Marco Rubio and his Turkmen counterpart Rashid Meredov wrapped up bilateral consultations last week in Washington, DC. The encounter suggested a new awareness on Washington’s part of Turkmenistan’s pivotal geostrategic location in the heart of Central Asia and its status as a major hub of natural resources. Since becoming head of state in March 2022, Turkmenistan’s President Serdar Berdimuhamedov has shifted his country’s foreign policy from one of strategic isolation to what might be called practical realism, whereby priority is given to fair trade and investments that are in line with national interests and long-term development. Like the other Central Asian heads of state, Berdimuhamedov also champions a pragmatic, interest-based foreign policy. Consequently, they find the current, pragmatic U.S. administration with its concern to work out deals (presumably mutually beneficial ones) more congenial than its predecessor, with its penchant for geostrategic maneuvering and ideology. Secretary Rubio recently observed: “A mature foreign policy requires a balancing of interests - that’s a fact.” This way of thinking goes over well in smaller independent states such as Turkmenistan and other Central Asian countries, whose key national priorities include establishing their statehood on a firm basis and safeguarding their sovereignty amid the turbulent great power politics being played out in their vicinity. Oil and Gas Over the years, Berdimuhamedov has insisted that foreign entities seeking access to the country’s vast natural gas reserves must play by Ashgabat’s rules. Home to the world’s fourth-largest gas reserves, Turkmenistan invites foreign participation in its energy sector, provided that agreements are structured as win-win arrangements and don’t give suitors the geostrategic upper hand. In this context, it would make sense for Washington to get the word out about two upcoming conferences in Ashgabat: The Turkmenistan Investment Forum, September 18– 19, 2025, which will serve to attract long-term investment into the country's economy, and the 30th Oil & Gas of Turkmenistan – 2025 International Conference & EXPO (OGT 2025) on 22–24 October. Turkmenistan had a strong 2024 in terms of energy, producing 77.6 billion cubic meters of natural gas and 8.3 million tons of oil. The OGT 2025 will showcase the country’s resource potential and new investment opportunities, focusing on upstream projects such as the Galkynysh gas field and the Caspian blocks, as well as on initiatives in the areas of renewable energy, methane mitigation, and infrastructure modernization. Moreover, Ashgabat wants to expand its Trans-Caspian and north-south economic corridors and complete the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, among other initiatives in transport and logistics. U.S. companies may want to explore these new opportunities. Travel Limitations to the U.S. Ashgabat is working with the U.S. Department of State to lift recently imposed restrictions on Turkmen citizens wishing to travel to the U.S. Both sides are aiming to ensure that applicants are properly screened before a visa is granted and that recipients comply with its terms. To further deepen ties, Washington should view Turkmenistan’s neutrality towards others on the global stage in security and foreign-policy matters not as an obstacle, but as an advantage that facilitates dialogue. While maintaining its advocacy for democratic principles,...

U.S.-Turkmenistan Relations

U.S.–Turkmenistan Rapprochement: Energy, Neutrality, and Digital Geopolitics

For more than three decades, Turkmenistan has stood apart from its neighbors. Since declaring independence in 1991, it has built its foreign policy around “permanent neutrality,” a status formally recognized by the United Nations in 1995. Neutrality has meant avoiding military alliances, steering clear of regional blocs, and limiting international engagement to carefully managed bilateral relationships. Ashgabat has been especially cautious in its dealings with Washington, keeping contacts minimal while relying overwhelmingly on China to buy its natural gas. That posture is beginning to shift. In 2025, the outlines of a quiet rapprochement between Turkmenistan and the United States are visible. The latest round of Annual Bilateral Consultations (ABCs) in Washington, coupled with Ashgabat’s more active role in the C5+1 regional dialogue, suggests a gradual warming. On September 19, 2023, Turkmen President Serdar Berdimuhamedov participated in the first C5+1 multilateral summit alongside the U.S. and regional counterparts, highlighting Ashgabat’s more active role in the platform. At the heart of this cautious opening are three themes: energy dependence, security on Turkmenistan’s southern border, and the geopolitics of digital connectivity. Annual Bilateral Consultations: A Structured Dialogue The ABCs were launched in 2010 as part of a U.S. initiative to formalize engagement with all five Central Asian states. They are yearly, structured meetings between senior officials that review the state of bilateral relations across political, economic, and security issues. In August 2025, Foreign Minister Rashid Meredov met Secretary of State Marco Rubio in Washington for the 11th ABC. According to the U.S. State Department release, the two sides “underscored their commitment to advancing U.S.-Turkmenistan relations, including through security cooperation, increased economic and investment opportunities, the advancement of religious freedom, and deepening engagement through the C5+1 diplomatic platform.” The statement was deliberately brief and omitted sensitive matters such as the partial visa restrictions Washington imposed on Turkmen citizens earlier that year. But the very fact of the meeting, following years of minimal contact, marked a notable warming. From Episodic Contacts to Broader Cooperation The rapprochement has begun to take shape in concrete ways. Trade between the two countries, though still small, nearly doubled in 2024 to reach $218.5 million. Turkmenistan exported textiles, chemicals, and gas-related equipment, while U.S. exports included aviation technology, electronics, and agricultural machinery. Overall, the trade volume remained the second-lowest among Central Asian states, but the sharp increase pointed to a deliberate effort to expand ties. Reflecting this momentum, on June 8, 2025, Turkmenistan’s Foreign Minister Rashid Meredov met with the Executive Director of the Turkmenistan–U.S. Business Council, Eric Stewart, to discuss cooperation across sectors, including energy, cybersecurity, green technology, and education. Security cooperation has grown more visible. Turkmenistan’s long border with Afghanistan has long been a vulnerability, and while Ashgabat avoided involvement in the U.S.-led war, it quietly welcomed assistance to reinforce border defenses and counter trafficking. The U.S. has provided equipment, training, and support for Turkmen border services, a low-profile effort documented in a Congressional Research Service report. Turkmenistan has invested over a billion dollars in Afghan infrastructure projects...

Kashagan

Kazakhstan Presses Oil Giants as Kashagan Revenues Face Scrutiny

The media in Kazakhstan is once again debating the revision of production sharing agreements (PSAs) with foreign companies in the country’s major oil consortia. PSA LLP, the state-owned operator authorized by the Ministry of Energy to represent Kazakhstan’s interests in the North Caspian Production Sharing Agreement, has released new data on revenues from the Kashagan field, information expected to reignite calls to amend agreements with major Western oil producers in Kazakhstan’s favor. President Kassym-Jomart Tokayev has publicly backed the discussion. In January, he instructed the government to intensify negotiations with foreign investors. "The implementation of production-sharing agreements for large fields has allowed Kazakhstan to become a reliable supplier of energy to the global market. These projects have made a great contribution to the country’s socio-economic development. However, large investments require a long-term planning horizon. Therefore, the government must intensify negotiations on extending PSA contracts, possibly on revised terms that are more favorable for Kazakhstan,” Tokayev said at an expanded government meeting. The PSA company, headed by Tokayev’s nephew, Beket Izbastin, reported that in 2024, the Kashagan consortium’s total revenue from oil, gas, and sulfur sales exceeded $11 billion. Of this, 80% covered capital and operating costs (“Cost Oil”), while only 20% came from “Profit Oil,” amounting to $2.2 billion. Kazakhstan’s share was 10%, or $220 million. Including the $430 million in taxes paid by the operator, NCOC, the country’s total revenue was $650 million. “With revenues of $11 billion, the republic’s share, including taxes, was only 6%, the lowest among oil companies not only in Kazakhstan but globally,” PSA said. Under the current terms, Kazakhstan’s share of Profit Oil will not increase until three billion barrels have been extracted from Kashagan. Only the first billion has been produced over the past decade. Shareholders are expected to begin paying a 30% income tax soon; KazMunayGas has already transferred an initial $45 million payment from the Kashagan profits. The fairness of this revenue distribution is now a central point of debate. Some observers believe the renewed focus ahead of the next parliamentary session could signal that Tokayev will again raise the issue in his annual address, alongside agreements for Karachaganak and Tengiz, the other pillars of Kazakhstan’s oil sector. Tengiz operates under a contract expiring in 2033, earlier than Karachaganak (2037) and Kashagan (2041). At his press conference in Astana last month, Prime Minister Olzhas Bektenov confirmed that negotiations with major oil companies had only just begun. “Indeed, there is a view that the country’s interests are significantly infringed upon. We are starting negotiations with our consortium partners to conclude new PSAs for a new period. This will be done in a measured and balanced manner, without sudden moves, while defending the national interests of our country,” Bektenov stated. The question of what exactly constitutes “national interests” remains open. In February, Mazhilis deputy Edil Zhanbirshin linked the issue to Kazakhstan’s dependence on imported fuel. Despite the $3.7 billion spent on modernizing the country’s three oil refineries, annual processing volumes remain below 18...

Israel-Iran Escalation

Central Asia and Israel, a Pragmatic Relationship That Never Truly Blossomed

The conflict between Israel and Iran is having both international and regional repercussions. The situation has been further inflamed by the U.S. bombing of several Iranian nuclear sites over the weekend, with Tehran responding by threatening retaliation on U.S. soil through the use of sleeper terrorist cells and the possible closure of the Strait of Hormuz, through which over a fifth of the world’s oil supply passes. While Israel's geographical position places it at the heart of the Middle East, Iran's location brings the Islamic Republic into close contact with Central Asia. The consequences of the conflict are therefore likely to be felt heavily in the Central Asian region. The close relations between Tehran and the capitals of Central Asia, due in part to their geographical proximity, are often highlighted. Less explored is the nature of the relationship between Tel Aviv and Central Asia and the lines along which it has developed since the dissolution of the Soviet Union. On both the Israeli and Central Asian sides, despite all the differences, relations began in the early 1990s, mainly based on certain mutual interests. From Israel's point of view, relations with Central Asia would mean expanding the circle of Muslim countries with which it had friendly ties, gaining greater influence in the region, and reducing its diplomatic isolation. From the Central Asian perspective, the appeal lay in increasing the number of its international partners, coupled with a desire to access Israeli know-how in numerous fields, and the possibility, through relations with Tel Aviv, of having a privileged channel of dialogue with the United States. More than three decades after the dissolution of the Soviet Union, relations remain good for the most part. “The positive relationship between Israel and Central Asia is driven by a combination of strategic, economic, and geopolitical factors,” Dr Zeev Levin, Coordinator of the Central Asian Research Unit at the Harry S. Truman Institute, told The Times of Central Asia. “One of the primary drivers is mutual interest in security and counterterrorism. Economically, Israel’s expertise in water management, agriculture, and technology is highly attractive to the arid, resource-seeking nations of Central Asia that aim to modernize their infrastructure and diversify their economies beyond oil and gas. Additionally, fostering ties with Israel provides a means of diversifying the foreign policy portfolios of the Central Asian republics.” This positive relationship, however, seems to have lost momentum in recent years due to several factors. Central Asian republics have increasingly oriented towards the East, moving closer to China and other players such as South Korea, Japan, and India, or towards other partners, such as the European ones, with Italy at the forefront in this regard. As Levin points out, the relation has cooled due to several factors: “Central Asian republics did look to Israel in the first decade of independence, but in the last decade to a much lesser extent, since Turkey and China are less complicated and cheaper options. For Israel, the region was never a priority or a point of...

Oil and Gas

Turkmenistan’s Gas Swap Deals Could Be Collateral Damage from Iran Conflict

Turkmenistan has the fourth largest reserves of natural gas in the world, but the country has found it difficult to export substantial volumes. Lack of export pipelines are one of the problems and it seemed Turkmenistan had partially solved this dilemma by arranging gas swap deals. Unfortunately for Turkmenistan, these deals involve Iran as the key country, and the Israeli-Iran conflict sheds new doubt on the ability of Iran to fulfill its part in the swap arrangements. So Close Turkmenistan signed a deal to supply 10 billion cubic meters (bcm) of gas annually to Iraq in late October 2024. It was the first major gas export deal Turkmenistan had signed in nearly two decades. That last big agreement was signed with China in 2006. It involved building four gas pipelines from Turkmenistan to China to eventually carry a combined 85 bcm of gas, 65 bcm of which would be Turkmen gas. Since the pipelines cross through Uzbekistan and Kazakhstan, both of those countries are allotted 10 bcm each of the capacity for their gas exports. The fourth branch that would have carried 30 bcm of Turkmen gas has not been built, leaving Turkmen gas exports to China averaging 35 bcm per year. At the moment, China is the only major customer for Turkmen gas. The second largest buyer of Turkmen gas is Uzbekistan, which only purchases about 2 bcm. Not even 20 years ago, Russia was purchasing more than 40 bcm of Turkmen gas, but by 2023 that had dwindled to 5.5 bcm, still leaving Russia as the second largest buyer of Turkmen gas. In July 2024, after negotiations over price broke down, the two parties chose not to renew that contract. That made the agreement with Iraq all the more important for Turkmenistan. However, there are no pipelines connecting the two countries. Yet So Far The Turkmen-Iraqi agreement calls for Turkmenistan to ship 10 bcm of gas to Iran, with Iran then sending 10 bcm of its gas to Iraq. Iran needs gas for its northern regions that are not connected to the domestic pipeline network that sources gas from the fields of in the south of the country. Turkmenistan has two pipelines to export gas to Iran. Both were built after independence in 1991, and could carry up to a combined 20 bcm. Since January 2017, when the Turkmen government made good on a threat to cut off Iran over unpaid bills for gas, almost no gas has been shipped through these pipelines. The first task is to perform maintenance, repairs, and upgrades on these pipelines so that Turkmenistan can physically send 10 bcm of gas to Iran. The Iranian pipeline to Iraq is functional. Iran was exporting gas to Iraq, but international sanctions on Iran hindered Iraq’s ability to pay for that gas. Prior to the agreement with Iraq, Turkmenistan signed a contract in early July 2024 with Iranian officials for the transfer of gas. It is unclear how far along Turkmenistan is in performing its pipeline...