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2019 †N5-6(170-171)
The annual International Gas Congress, which was held on the Turkmen coast of the Caspian Sea for the tenth time, remains a major venue for discussing the state and prospects for development of the global gas industry and, through this prism, identifying opportunities for implementation of investment projects in Turkmenistan. The tenth anniversary gas forum "TGC - 2019" was no exception. It brought together about 450 delegates from 30 countries, including top managers of the largest oil and gas companies, representatives of the relevant ministries and departments, international organizations and financial institutions, diplomatic and scientific community as well as the mass media.
The foreign participants were briefed on the key areas of Turkmenistan's energy strategy and long-term plans of development of the country's gas industry. The delegates were particularly interested in the aspects of implementation of the strategy for diversification of natural gas exports to foreign markets. In this area, increasing gas supplies to China and Russia, resuming gas exports to neighboring Iran, as well as prospects for natural gas exports to Southeast Asia and Europe were named among the important areas of work.
In this regard, there was presented detailed information on the pace of implementation of the Turkmenistan - Afghanistan - Pakistan - India gas pipeline project (TAPI). As was noted, the completion of construction of the Turkmen section of the gas pipeline is expected by the end of 2019. According to the latest data, the total length of the gas pipeline with the capacity of 33 billion cubic meters of gas per year will be 1840 kilometers, including 205 km across Turkmenistan. Preparations are also under way for the launch of construction of the pipeline sections in Afghanistan and Pakistan.
Representatives of the TAPI Pipeline Company Limited Consortium, the State Bank for Foreign Economic Affairs of Turkmenistan, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Allen & Overy LLP, Credit Suisse and Bilnger Tebodin Middle East Ltd. spoke about progress in promoting the TAPI project.
Exports of gas through the pipeline will begin in 2020 following the completion of the first phase of the TAPI project. The second phase provides for construction of compressor stations along the gas pipeline that should increase its capacity to the designed level.
As Special Assistant to the Prime Minister of Pakistan (petroleum division) Nadeem Baber emphasized, the Government of Pakistan and TAPI Pipeline Company Limited signed the General Terms and Conditions of the Agreement at the beginning of 2019 that will soon make it possible to start the implementation of the project in Pakistan.
The Senior Advisor to the Minister of Mines and Petroleum of Afghanistan, Head of the TAPI Coordination Office, Abdullah Asifi, noted the significant progress in surveying the pipeline route in Afghanistan, as well as financing and ensuring the safety of construction of the gas pipeline.
"I am very impressed with the progress made by the parties participating in the TAPI project," said Roland Pladet, finance specialist of the Asian Development Bank. "ADB has always supported the TAPI project and will continue doing so at the highest governmental level."
He also noted the huge potential of the project in all areas. It is technically, economically and financially important and beneficial to all parties. Therefore, ADB is ready to cooperate with TAPI in security issues, as well as in social and administrative areas.
The forum participants were also briefed on the five-year experience of industrial development of Turkmenistan's largest gas field, Galkynysh, with the total area exceeding 4 thousand square kilometers. The field is now accounting for more than 40 operational wells with an average production rate of 2 million cubic meters of gas per day. Over the year, they will ensure the output of more than 29 billion cubic meters of gas.
The Galkynysh field is currently at the initial stage of development that will be carried out in several phases, including for the TAPI project. According to Gaffney, Cline and Associates, the total reserves of the field are now estimated at more than 27 trillion cubic meters of gas, and this estimate can be revised upward in the future.
Three large gas-processing complexes for desulfurization and production of 30 billion cubic meters of tank gas per year were built and commissioned at the Galkynysh filed with participation of Hyundai Engineering CO. LTD (Republic of Korea), CNPC (China) and Petrofac International LLC (UAE).
According to the British Petroleum Corporation's World Energy Development Outlook until 2040 (BP World Energy Outlook, 2019), the global demand for natural gas will increase steadily over the next twenty years. At the same time, the highest growth rates of natural gas consumption are expected in China, India and other Asian countries.
In this context, the forum participants emphasized the importance of Turkmenistan's initiatives aimed at creating new global energy security architecture. Their relevance is confirmed by the resolutions "Reliable and Stable Transit of Energy and Its Role in Ensuring Sustainable Development and International Cooperation" that were put forward by Turkmenistan and adopted twice by the UN General Assembly.
According to the BP forecast, the demand for gas in China will more than double in the following 20 years. Gas supplies to China through the pipelines currently account for about 40 percent of its total gas imports. In this context, exports of natural gas from Turkmenistan play an important role in ensuring China's energy security.
To date, the Central Asia-China gas pipeline has three parallel lines (A, B, and C) with the total throughput of 55 billion cubic meters of gas per year. A fourth line (D) with the capacity of 25 billion cubic meters is currently under construction. Following the launch of the pipeline in December 2009, more than 263 billion cubic meters of natural gas have been exported to China from Central Asia. At the same time, Turkmenistan ensures more than 80 percent of pipeline deliveries of gas.
The gas forum participants also discussed the technical aspects of construction of export gas pipelines in the Caspian Sea. There emerged a wide range of opportunities for their construction after the signing of the Convention on the Legal Status of the Caspian Sea in 2018. Turkmenistan is currently looking at the options of exporting natural gas westward to Europe.
Along with the implementation of the strategy for diversification of gas exports, Turkmenistan in cooperation with foreign companies is currently working towards establishing new oil and natural gas processing plants for finished oil and gas chemical products that are in demand both in the domestic and foreign markets.
For example, in 2018, the Garabogazkarbamid plant was put into operation in the west of the country. It produces 1.2 million tons of urea fertilizers, most of which are exported. A polymer plant was launched in the village of Kiyanly to process 5 billion cubic meters of gas per year and, using this gas, to produce 386 thousand tons of polyethylene and 81 thousand tons of polypropylene.
The world's first plant for production of synthetic gasoline from natural gas was built in Akhal province. Fitted with innovative equipment, the plant will annually process about 1.8 billion cubic meters of natural gas and produce 600 thousand tons of synthetic gasoline in accordance with Euro-5 standard, as well as diesel fuel and liquefied gas.
Turkmenistan's socio-economic development program for 2019-2025 provides for the further diversification of the oil and gas industry. During this period, the country plans to build a number of new gas chemical complexes for production of synthetic gasoline, rubber and polystyrene, methyldiethanolamine, polyvinyl acetate and other polymers.
"Over the past 10 years, the International Gas Congress has become the key venue to discuss issues relating to development of the Caspian region and the Central Asian countries as a whole," said Eder Leonty, Deputy General Director of Gazprom VNIIGAZ LLC, who participated in the forum. "It brings together the leading players of the global gas market, thus helping to establish and strengthen cooperation."
Highly appreciating Turkmenistan's prospects in the gas sector, the scholar emphasized that the country with the world's fourth gas reserves is a big regional center for gas production, export and processing. In his opinion, gas pipelines from Turkmenistan to China, Iran, Russia and the under-construction TAPI pipeline serve as connecting links and ensure energy security in the region.
Eder Leonty also highly rated the prospects of development of the Turkmen-Russian relations in the gas sector. "Turkmenistan is Russia's long-standing key trading partner in the gas sector. This is a mutually beneficial cooperation, which has all conditions for development," Leonty said.
It is noteworthy that the Russian expert's opinion has been already confirmed in practice. Beginning January 2019, Gazprom resumed purchases of Turkmen gas in a test mode. And in July, the Turkmengaz State Concern and Russian holding signed a five-year contract for the annual sale and purchase of 5.5 billion cubic meters of gas. Moreover, Gazprom is interested in establishing cooperation in gas processing and production of finished gas chemistry products in Turkmenistan.


©Turkmenistan Analytic magazine, 2005