New markets and long-term partnership in Turkmenistan's energy policy
Neitralnii Turkmenistan, 30.12.2009
The year 2009 has been marked with the truly historic landmarks in the successful implementation of Turkmenistan's energy policy. In the period of the world economic crisis that has adversely affected the economies of the most of the developed countries of the world Turkmenistan abiding confidently by the sustainable development strategy has enhanced its reputation as one of the leaders on the world energy market, expanded energy export routes, strengthened the material and technical base of the fuel and energy sector and ensured a stable increase in the reserves of raw materials and the potential to produce various sources of energy.
Pragmatism of mutual interests
The major vectors of Turkmenistan's energy policy include the development of wide international cooperation on a basis of equality and mutual benefit. In this regard Turkmenistan assigns primary importance to the purely pragmatic approach and mutual economic benefit. This consistent position underlying President Gurbanguly Berdimuhamedov's foreign policy strategy has not only won Turkmenistan the worldwide support but also offered a powerful incentive to many countries and leading oil and gas companies to establish long-term partnership with our country.
As is known, Turkmenistan ranks among the top five oil and gas rich countries of the world. According to international and Turkmen experts, the raw material resources of Turkmenistan are 20.8 billion tons of oil and 24.6 trillion cubic metres of natural gas. In compliance with the new energy strategy of President Gurbanguly Berdimuhamedov these huge resources of the country will be used most effectively to steadily improve the welfare of many generations of the Turkmen people as well as to ensure global energy transit in the interests of the whole mankind. So far as the advantageous geographical location of Turkmenistan and its natural gas largest reserves combined with the governmental strategy to diversify export routes enable the country to ensure long-term gas supplies to Europe and Asia.
It was fulfilling these tasks that numerous initiatives put forward by the Turkmen leader at the international and national levels to attract new investments to implement oil and gas large-scale projects were aimed at.
These include the Resolution of the UN General Assembly on the Reliable and Stable Transit of Energy and Its Role in Ensuring Sustainable Development and International Cooperation adopted last December on Turkmenistan's initiative. This year Turkmenistan has taken several important concrete steps to implement these proposals.
The Turkmen capital hosted the international high-level energy conference under the United Nations auspices this April. This forum that brought together the heads and members of the governments of several countries, the representatives of the authoritative international and financial organisations and over one hundred of the large companies became a significant step to ensure the systematic activity aimed at searching and elaborating a unified approach to the functioning of the global energy infrastructure.
The President of Turkmenistan put forward the new important proposals to address this issue of particular concern to the whole mankind during his visit to the United States this September. Addressing the 64th session of the UN General Assembly, the Turkmen leader suggested establishing an expert group, which would develop the international legal instrument for energy transit through considering the proposals put forward by the interested countries and international organisations. Gurbanguly Berdimuhamedov stated that establishing this group would be the first step to draft the UN complex document aimed at ensuring the effective functioning of the global energy transit infrastructure.
Turkmenistan-Europe: diversification brings together
The major components of Turkmenistan's energy strategy in the epoch of new Revival include diversification of energy transit to world markets. Diversification of hydrocarbon export is viewed by Ashgabat as a key factor for ensuring reliable and stable transit of fuel in the global energy infrastructure.
To fulfill the tasks set by the President of Turkmenistan the interagency working group for energy diplomacy was established in Turkmenistan this April. Its major functions are to draft the proposals for furthering international cooperation in the energy sector, study and analyze the situation on the world energy market, contribute to drafting the energy contracts and agreements, prepare the proposals for cooperation with the international energy organisations and financial institutions.
The interagency working group aims its activity at studying the new opportunities to transit Turkmen energy to the promising European market. On the one hand, it is conditioned by the large natural gas reserves that Turkmenistan is going to offer to potential buyers in the near future. On the other hand, the EU member countries endeavouring to diversify 'blue fuel' imports are interested in direct energy supplies from the Caspian region and Turkmenistan in particular.
The coincidence of the interests of Turkmenistan as the largest gas exporter in Central Asia and the EU countries - the largest energy importers has conditioned an increasing dynamics of intergovernmental relations as well as development of partnership between the companies in the EU member countries and Turkmenistan this year.
The development of long-term mutually advantageous energy cooperation was a focus of numerous talks and meetings conducted at the intergovernmental and interagency levels this year. Summarizing the results it can be said that the process of searching the mutually beneficial forms of partnership and filling the ideas and trends set forth in the Memorandum of Understanding and Energy Cooperation signed between Turkmenistan and the European Union in May 2008 with a concrete content has been taking place throughout the year.
The EU's increasing interest in Turkmenistan was illustrated by the first international investment forum and the Oil and Gas of Turkmenistan -2009 International Exhibition and Conference, which had been conducted in Ashgabat this October and November. The fact that the companies and financial institutions from the Old World were in a majority among many business representatives from the United States, the European Union, the CIS and East Asian region that participated in these forums is eloquent. They include such well-known companies as BP, OMV, Shell, Total, Statoil, Nabucco Gas Pipeline, RWE, Gaffney Cline & Associates, Eni and others.
It is important to note that the representatives of the western companies underscored Turkmenistan's increasing role in ensuring stable transit of energy to world markets, including the European market. The European experts forecast that in a few years the demand in natural gas from Turkmenistan as well will increase in Europe. Thus, Cristobal Burgos, Adviser to Directorate General for Energy and Transport, European Commission said, "Despite the crisis the level of the EU's dependence on gas imports will grow. This is the good news for Turkmenistan. For Europe diversification of supply is the number one issue. We are interested in gas supplies from Turkmenistan to the EU through the Nabucco pipeline."
An increasing role of gas from the Caspian region in the volume of European gas imports is forecasted. According to the estimates of the International Energy Agency, Europe will need gas from the Caspian region till 2030, and the gas prices will rise. By 2030, the share of Turkmenistan in meeting Europe's needs will increase significantly and put it on the 3rd-4th place.
Therefore, today the European companies are highly interested in collaborating with Turkmenistan in the joint investment projects aimed at large-scale development of gas fields. For this purpose the Europeans are ready to make substantial investment, advanced technologies and state-of-the-art equipment that will ensure highly efficient long-term hydrocarbon production of.
The first official visit of President Gurbanguly Berdimuhamedov to Italy in late November, the talks between the Turkmen leader with Prime Minister Silvio Berlusconi and the business forum with the Italian companies is illustrative in this aspect. The visit resulted in signing several bilateral documents including the intergovernmental agreement on encouragement and reciprocal protection of investments. A number of the Italian companies expressed the willingness to operate on the Turkmen oil and gas market. The first of them will be the ENI gas concern, which signed the memorandum of understanding with the State Agency for Hydrocarbon Resources Management and Use under the President of Turkmenistan. CEO of ENI Paolo Scaroni said that "his company stands ready to offer its potential and technologies for oil and gas exploration, extraction and refining to Turkmen partners.
Exploring new markets
The new historic date - the 14th of December went down in the history of independent Turkmenistan, the day when the ceremony of putting the largest energy pipeline of XXI century - the TransAsian gas pipeline in operation took place with the participation of President of Turkmenistan Gurbanguly Berdimuhamedov and the leaders of the three friendly countries - China, Uzbekistan and the Republic of Kazakhstan.
Since that day the Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline that will supply Turkmen natural gas to China for 30 years started to function. The launch of a new export route of Turkmen gas marked a crucial step to implement successfully the energy strategy of Turkmenistan that contributes significantly to building the modern architecture of global energy security.
Gurbanguly Berdimuhamedov emphasized that the construction of the TransAsian gas pipeline was not merely a mutually advantageous economic and commercial project. This is an event of profound political significance and convincing evidence of achieving the ultimate goal - to ensure the balance of the interests of all and each players of the energy triad - producers, transit countries and consumers through political will and constructive approach.
Under the contract with Turkmengaz State Concern the Turkmen section of the TransAsian pipeline from Malay field to Bagtyyarlyk field was built by the Russian large company Stroytransgaz. The Russian builders undertook the commitments to construct the pipeline, gas-treating and gas-measuring stations. Construction of gas pipeline became the polygon for unique technical solutions based on high professionalism of the designers and builders. For example, the contractors performed the unique works to pull the pipe underground to build a passage under the riverbed of the Amu Darya River in the most difficult section. For the first time in world practice a pipeline joint 1,740 metres long with the diameter of 1,420 millimeters was pulled along the riverbed!
The pipeline to China will have an important place in the network of transnational export pipeline from Turkmenistan - both existing and projected. Dovletabat-Salyr Yap gas pipeline - the second export pipeline in neighbouring Iran will be put into operation in the near future.
Construction of a new gas pipeline to Iran was a concrete implementation of the agreements reached between Turkmenistan and Iran this July. In particular, the increase of Turkmen gas exports up to 14 billion cubic metres a year was negotiated with the National Iranian Gas Export Company. Turkmenistan will supply a certain amount of 'blue fuel' via the existing Korpeje-Kurtkuyi pipeline located in the west of Turkmenistan and additionally via the new pipeline Dovletabat-Salyr Yap.
This July, Gurbanguly Berdimuhamedov instructed the high-ranking officials of the oil and gas ministries and departments to ensure the construction of a new pipeline as soon as possible. It should be noted that this project was implemented by Turkmen builders, coped with the task. The subdivisions of the Maryneftegazstroy Trust performed all kinds of works including layout survey, cleaning, planning of route, laying and welding of pipes. The total length of the pipeline from Dovletabat field to Salyr Yap settlement on the border with Iran is 30.5 kilometres.
The estimated capacity of the new gas artery is 12.5 billion cubic metres of 'blue fuel' a year. Gas will be supplied from one of the largest fields in Turkmenistan - Dovletabat.
Characterizing the gas sector as a priority trend in energy cooperation Gurbanguly Berdimuhamedov stated that Turkmenistan and Iran intended to create the conditions conducive to increasing natural gas supplies to Iranian consumers up to 20 billion cubic metres a year.
Today, Turkmenistan has the substantial reserves of tank gas that is in increasing demand on world markets. Therefore, the Turkmen state is taking the measures to expand outlets for Turkmen energy. Putting the gas pipelines to China and neighbouring Iran into operation is a step being taken to diversify export routes of Turkmen natural gas for the benefit of our people and the peoples across the world.
