NEW WAYS OF COOPERATION
The "open doors" policy and favorable conditions created in Turkmenistan for attraction of foreign investment have made it possible to increase significantly international cooperation in the oil and gas sector in recent years. This was clearly demonstrated by the XXII International Conference and Exhibition "Oil and Gas of Turkmenistan 2017" in Ashgabat. The forum aimed to show the trends and prospects of international cooperation in the fuel and energy sector. It was organized by the State Concern "Turkmenneft" jointly with Summit Trade Events company and the Chamber of Commerce and Industry of Turkmenistan.
The exhibition's main sections covered the topics of oil and gas geology and geophysics, prospecting and exploration of deposits, development and operation of wells, extraction and processing, transportation and storage, oil production technologies, oil refining, oil and gas chemistry, equipment for the gas, oil and petrochemical industries, etc.
Turkmenistan's pavilions at the exhibition presented the achievements of the State Concerns "Turmengaz" and "Turkmenneft", the State Corporation "Turkmengeology" and the Turkmenbashi complex of oil refineries in the oil and gas industry.
The conference saw participation of 450 delegates from 170 companies from 33 countries. On the first day, the conference discussed prospects for development of international, regional and domestic oil and gas industries and building an energy strategy for the future.
Acting Chairman of the State Concern "Turkmengaz" Myrat Archayev briefed the conference participants on the prospects for development of Turkmenistan's oil and gas industry and priority areas for attraction of foreign investment. As he noted, Turkmenistan's potential hydrocarbon reserves amount to 71 billion tons of oil equivalent, of which 53 billion tons lie onshore, while 18 billion tons lie offshore. At the same time, Turkmenistan's total natural gas reserves are estimated at 50 trillion cubic meters. According to independent experts, Turkmenistan ranks 4th in the world in terms of proven natural gas reserves.
With such large-scale gas reserves, Turkmenistan is naturally interested in diversifying the transport infrastructure that can provide reliable and long-term supplies of natural gas to consumers by creating a ramified pipeline network.
In fact, Turkmenistan is now one of the main suppliers of natural gas in the Central Asian region, being the largest supplier of natural gas to China through the transnational gas pipeline Turkmenistan - Uzbekistan - Kazakhstan - PRC. Since the end of 2009, when this gas pipeline was put into operation, and up to now, more than 184 billion cubic meters of natural gas have been supplied to China from Turkmenistan.
There was also noted an opportunity to use the existing system of gas pipelines in the northern direction through which Turkmenistan historically exported natural gas to Russia and other CIS countries. If buyers and transit countries reach mutually acceptable agreements, the Central Asia-Center (CAC) gas pipeline can be used to supply natural gas from Turkmenistan to the CIS countries and Eastern Europe. Two more existing gas pipelines to the south can be used to supply natural gas to consumers in the northern regions of Iran.
Turkmenistan is also stepping up work to build new export gas pipelines to Europe and Asia. Construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI) is now the most active ongoing project. In addition, Turkmenistan, Turkey and the EU have been working for many years on the project of construction of the trans-Caspian gas pipeline that should ensure long-term and reliable supplies of natural gas to the Turkish and European markets.
Speaking at the conference, Minister of Energy of Georgia Ilya Eloshvili and Vice-president of the Azerbaijani SOCAR company Elshad Nasirov noted that Georgia and Azerbaijan support Turkmenistan's desire to diversify natural gas exports, including in the European direction.
In his speech, Secretary General of the Energy Charter Urban Rusnak stressed that Turkmenistan's very fruitful chairmanship in the Energy Charter in 2017. In this period, the Government of Turkmenistan and the International Energy Charter made significant efforts in implementing the UN General Assembly resolution on reliable and stable transit of energy resources and its role in ensuring sustainable development and international cooperation. This resolution was adopted on 17 May 2013 at Turkmenistan's initiative and supported by 72 UN member states.
As the head of the State Corporation "Turkmengeologiya" noted in his speech, the Program of the President of Turkmenistan on Socio-Economic Development of the Country for 2018-2024 specifically requires that the Corporation should further increase the explored reserves of oil and gas and prepare them for development.
Turkmenistan's explored reserves currently account for hundreds of millions tons of oil and several trillion cubic meters of natural gas, which is sufficient to meet the domestic needs and ensure their uninterrupted exports via existing and planned gas pipelines for many years ahead. Many promising oil and gas deposits have been identified and availability of huge explored and promising hydrocarbon reserves has been proved in Turkmenistan. About two hundred oil and gas fields have been discovered. Nearly three hundred promising oil and gas structures have been prepared for deep drilling.
The Turkmenistan - Afghanistan - Pakistan - India (TAPI) gas pipeline was one of the central topics of discussion at the forum, as international observers and experts follow this project with great interest. The Chief Managing Director and Chairman of the Board of Directors of TAPI Pipeline Company Limited, representatives of Turkmenistan's Foreign Economic Activities Bank, the Asian Development Bank and the Presidential Administration of Afghanistan took part in the discussion.
As speakers noted, the TAPI project, which is of great importance for the region, is moving fast enough. Leading consulting and legal companies are involved in this project. A number of export credit agencies of Europe and Asia are interested in joining the construction of the gas pipeline in the territories of Afghanistan and Pakistan. As is known, the State Concern "Turkmengaz" is now building the Turkmen section of TAPI at its own expense.
International tenders are currently under way for the purchase of equipment for the pipeline and related infrastructure and laying the routes in Afghanistan and Pakistan. The Consortium has full support of all countries involved. Work is underway to raise funds for the pipeline, and construction work in the Afghan and Pakistani stretches of the pipeline is due to start in the near future. Therefore, construction of the TAPI pipeline should be completed on schedule by the end of 2019, and the first supplies of natural gas will begin.
The representative of the Turkmenbashi complex of oil refineries delivered one of the key speeches. He spoke about international cooperation in developing the oil refining and petrochemical industry of Turkmenistan. As was noted, about 55 percent of the TCOR's products are exported.
According to the recently adopted Program for Development of the Oil and Gas Industry of Turkmenistan until 2024, the oil refining industry will focus on construction of new technological facilities to ensure deep processing of more volumes of oil and bringing the refining efficiency from 84 to 95 percent.
Putting into operation new large facilities will ensure the output of products in accordance with the European standard. This will improve competitiveness of products and expand their range through production of new types of petroleum products.
It was also noted at the conference that despite the long history of oil extraction there is still huge quantities of hydrocarbon resources yet to be explored in the bowels of Turkmenistan. Nowadays, with latest drilling rigs and equipment from the world's leading manufacturers the State Concern "Turkmenneft" can drill wells down to the depth of more than seven thousand meters. In fact, while doing prospecting work in the Uzynada area in the south-west of the country, the Concern completed drilling Turkmenistan's first 7150-meter deep exploratory well No. 7. A commercial flow of gas and condensate was obtained during the well testing.
It is important that in the future the Concern will start implementing plans for exploration of deep-water fields in the Turkmen sector of the Caspian Sea with the potential resources estimated at 18.2 billion tons in oil equivalent. The first steps in this direction were made at the Northern Goturdepe field in the shallow waters of the Caspian Sea.
The conference also discussed issues related to developing the gas chemical sector of Turkmenistan. It is in this sphere that international cooperation, foreign investments and technological innovations should play a decisive role.
In the next decade, a number of new gas and petrochemical enterprises will be established in the country. The dynamic development of Turkmenistan's oil and gas chemical industry is expected to contribute to the industrialization of the regions, diversification of the economy, increasing the output of import substituting and export products.
In fact, there are ongoing projects for natural gas processing and manufacturing finished products initiated by Turkmenistan earlier. For example, a consortium of companies consisting of Toyo Engineering Corp (Japan), Hyundai Engineering Go.Ltd and LG International Corp (Korea) is currently building a gas chemical complex for production of polyethylene and polypropylene in the coastal village of Kiyanly.
Another consortium of companies consisting of Kawasaki Heavy Industries (Japan) and Rnesans Endstri Tesisleri Inaat Sanai ve Ticaret A.. (Turkey) is building a plant for natural gas processing and production of A-92 gasoline in accordance with Euro-5 standard in Ovadandepe in Akhal province. In May 2017, catalytic reforming unit LCH-35-11/1000 was commissioned at the Seidi oil refinery, enabling it to produce 412 thousand tons of high-octane component of A-98 gasoline annually.
These projects require significant financial resources, application of modern achievements of science and technology, as well as joining efforts with international, regional and national companies and financial institutions.
The forum was also the venue of business meetings between the heads of Turkmenistan's oil and gas complex and foreign companies that discussed specific proposals for mutually beneficial partnership.