China Turns to Turkmenistan for Gas

March 15, 2011
China is set to sign an agreement with Turkmenistan later this year to boost its future annual natural gas purchases by 20 billion cubic meters, state newspaper Neutral Turkmenistan reported. The deal means Turkmenistan’s annual gas sales to China will eventually reach 60 billion cubic meters. The deal comes as Russian gas monopoly Gazprom has yet to agree on prices and pipeline routes.

“Turkmenistan has enormous oil and gas reserves,” Oil Minister Bayramgeldy Nedirov said at an oil and gas conference in Singapore recently. “There are 160 discovered fields and 50 under development.” The country, holder of the world’s fourth-largest gas reserves, opened a link to China in 2009 as shipments to Russia collapsed following an explosion on a Soviet-era pipeline in April of that year.

Turkmenistan will sell 17 billion cubic meters of the fuel to China this year and 20 billion next year, Turkmenistan’s First Deputy Prime Minister Baymurat Hojamuhamedov was quoted as saying by the press in Singapore. Turkmenistan sent 2.59 million metric tons, or about 2.9 billion cubic meters, last year, according to China’s customs data.

Turkmen President Gurbanguli Berdymukhamedov is set to visit China later this year to formalize the deal. Turkmenistan already has existing gas contracts with Russia and Iran, and has expressed ambitions to also begin exporting to Europe, Afghanistan, Pakistan and India.

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