Translated material
Energy rod
Turkmenistan and China signed an agreement to increase gas pipeline capacity
Oral statements by President of Turkmenistan Gurbanguly Berdimuhamedov about increasing the capacity of the gas pipeline to China, made in Beijing three weeks ago (when he flew to the opening of the Olympics), are enshrined in a framework agreement. Last Friday, during the official visit of Chinese leader Hu Jintao to Ashgabat, five bilateral documents on cooperation in the fields of energy, trade, security, culture and education were signed. The new energy agreement represents another agreement between the state-owned Turkmengas concern and the China National Petroleum Corporation (CNPC) to expand cooperation in the gas industry. It provides for an increase in the capacity of the pipeline, which should be put into operation next year, from 30 to 40 billion cubic meters of gas per year. It is unknown whether this issue has been agreed upon with Kazakhstan and Uzbekistan, which are transit countries and also expect to sell gas to Beijing. However, Hu Jintao arrived in the capital of Turkmenistan from Dushanbe, where the Shanghai Cooperation Organization summit was taking place, which means he could discuss gas issues with the Kazakh and Uzbek leaders.In addition to signing five agreements, Berdymukhamedov and Hu Jintao agreed to create a Turkmen-Chinese cooperation committee. “This partnership body,” said the President of Turkmenistan, “provides for closer cooperation in specific areas and in the long term.” “We will strengthen cooperation in the energy industry and accelerate the implementation of the gas pipeline project,” the Chinese President promised.
“Speaking different languages, we easily understand each other, professing common principles and views on the world, as well as the future of our cooperation,” Interfax quotes Mr. Berdymukhamedov as saying. “Of course, the core of our partnership is the energy sector, where Turkmenistan, which has colossal, world-scale hydrocarbon reserves, acts as a champion of the diversification of its exports in the general interests.” According to him, it was in this area that the parties managed to achieve significant success. “Today, through our joint efforts, the outlines of the Turkmenistan-China transnational gas pipeline, which originates on the right bank of the Amu Darya, where Turkmen geologists discovered large oil and gas fields, are already clearly visible,” the president said. -- The future gas pipeline, through which the PRC will annually supply not 30, as previously planned, but 40 billion cubic meters of natural gas, is rightly called the project of the century. And not only because of its truly unprecedented length, amounting to about 7 thousand km, but also because of the role it plays in the global energy market and in integration processes throughout the Asian geospace.”
The terms of gas supplies to China have not yet been agreed upon and, apparently, will be the subject of bargaining closer to the time of commissioning of the pipeline. As you know, the first framework agreement on gas supplies to China was signed by ex-President of Turkmenistan Saparmurat Niyazov in the spring of 2006. Later, gas-bearing areas on the right bank of the Amu Darya, according to Ashgabat, were identified as a resource base. Turkmengaz and CNPC signed a production sharing agreement (for geological exploration and development), but its parameters, including the volume of reserves and production, remain classified to this day. In addition, preliminary agreements are known about the supply of Kazakh gas to China (up to 10 billion cubic meters per year). As part of this project, Astana is going to gasify the south-eastern part of the country and at the same time gain the opportunity to diversify gas exports.
Baku has not yet accepted the offer of Gazprom, which is ready to buy all of Azerbaijan’s export gas, but has not rejected it either. A decision will emerge following negotiations with Gazprom and the Turkish Ministry of Energy, Azerbaijani Foreign Minister Elmar Mammadyarov said in Ankara on Friday. “We have not yet given an answer, meetings continue with both Gazprom and the Turkish Ministry of Energy,” he said. INTERFAX