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Turkmenistan to boost gas deliveries to China

March 4, 2011


ASHGABAT, Turkmenistan (AP) — Energy-hungry China is set to sign an agreement with the Central Asian nation of Turkmenistan later this year to boost its future annual natural gas purchases by 20 billion cubic meters, state newspaper Neutral Turkmenistan reported Wednesday.

The deal means Turkmenistan’s annual gas sales to China will eventually reach 60 billion cubic meters — equivalent to more than half China’s entire natural gas consumption last year.

Turkmenistan began delivering gas to China through a newly completed pipeline in late 2009, but that route is only expected to reach full annual capacity of 40 billion cubic meters by 2015. As of mid-February, Turkmenistan had supplied 5.8 billion cubic meters of gas through the pipeline, according to Chinese oil company CNPC.

New pipelines will need to be built to allow the planned increase in deliveries.

Turkmen President Gurbanguli Berdymukhamedov is set to visit China later this year to formalize the deal.

Neutral Turkmenistan also reported that the China State Development Bank has agreed to loan state gas producer Turkmengaz an unspecified amount of money. The bank has already issued soft loans to Turmengaz worth $4 billion.

Turkmenistan already has existing gas contracts with Russia and Iran, and has expressed ambitions to also begin exporting to Europe, Afghanistan, Pakistan and India. Some energy experts have expressed skepticism about the Central Asian nation’s ability to meet that much demand, however.

Beijing has been actively tapping into Central Asia’s vast energy potential for several years now, but the last few weeks have seen an notable uptick in Chinese investment in the region.

In February, Kazakhstan signed a long-term contract worth several billion dollars to supply uranium to China, part of a cooperation program with Guangdong Nuclear Power Co.

Kazakh media cited President Nursultan Nazarbayev as saying Kazakhstan could eventually provide China with up 40 percent of its uranium requirements.

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