The International Conference and Exhibition “Oil and Gas of Turkmenistan” (OGT–2022) was held in Ashgabat. It was organized by the State Concerns “Turkmengas” and “Turkmenneft”, the Chamber of Commerce and Industry of Turkmenistan and the State Corporation “Turkmengeology”. The twenty-seventh industry forum brought together more than 500 delegates from 45 countries, including representatives of government agencies, national and international companies and organizations, research centers and specialized universities, foreign diplomatic missions.
The main exhibitors such as the State Concerns “Turkmenneft”, “Turkmengas”, “Turkmenhimiya”, the State Corporation “Turkmengeology”, as well as dozens of industry enterprises and private entrepreneurs operating in the fuel and energy complex presented their production capacity. The exhibition stands with cooperation offers from companies of Azerbaijan, UK, Austria, China, Malaysia, the United Arab Emirates, the Russian Federation, Singapore, the USA, Turkey, Japan stood next to the booths of the exhibition participants from Turkmenistan.
The industry forum demonstrated the opportunities for cooperation with foreign partners in priority areas of development of the fuel and energy sector of Turkmenistan, including development of existing and optimization of production at new onshore oil and gas fields, development of offshore blocks in the Turkmen sector of the Caspian Sea, diversification of pipeline routes for energy exports and others.
As was noted, energy sphere is one of the priority sectors of the Turkmen economy and plays an important role both in the country’s gross domestic product (GDP) and Turkmenistan’s exports (almost 80 percent). This became possible thanks to the progressive implementation of major projects in the country aimed at developing the production capacity of the industry’s enterprises, increasing the output, processing and export of energy resources.
It was also emphasized that projects on construction of oil and gas pipelines, exploration and development of new oil and gas fields, as well as construction of related infrastructure made Turkmenistan one of the leading energy powers. Favorable conditions were created in the country for domestic and foreign investments in projects on development and extraction of raw materials, development of hydrocarbon reserves and construction of trunk pipelines.
The topic of deep processing of natural gas in Turkmenistan was the most salient in the reports delivered at the conference. And this is quite natural in modern conditions, as international geopolitical risks are significantly increasing, and the structure of energy supply and demand is changing profoundly on a global and regional scale. At the same time, secured global energy supplies and transition to green and low-carbon development are a growing challenge.
Europe, despite undergoing the energy crisis, will obviously remain committed to the development of green energy in the long run. That is why one can continue hoping just as well that the EU will someday move from the traditional assurances of its interest in buying Turkmen gas to practical steps in this direction. However, for over 14 years, Europeans have called Turkmenistan a part of the Southern Gas Corridor that can be enlarged to handle additional flows of Central Asian gas. Such flattering assessments were once again repeated at this conference.
By the way, this position of the European Union was recently confirmed by President of the European Council Charles Michel, who spoke at the UN climate conference COP27 in Egypt in early November 2022. According to him, the EU investments in renewable energy will be increased and the energy crisis has only strengthened the EU’s resolve to achieve its climate protection goals. Michel stressed that the EU’s climate protection goals remain unchanged: carbon neutrality by 2050 and zero greenhouse gas emissions.
Therefore, Turkmenistan will most likely have to rely on increasing natural gas exports to China from the current 40 billion cubic meters per year in the near future. Plans are being actively discussed for construction of the 4th line of the gas pipeline to China that will help increase exports by another 25 billion cubic meters per year. In the longer run, the Turkmenistan – Afghanistan – Pakistan – India gas pipeline will be put in operation, ensuring exports of another 30 billion cubic meters of gas per year.
In this situation, Turkmenistan, being rated fourth in the world in terms of natural gas reserves, relies primarily on the dynamic development of the gas processing and gas chemical industries. This strategy was successfully started several years ago, and now it’s time to expand in this direction.
As Chairman of the State Concern “Turkmenhimiya” Niyazly Niyazlyev noted at the OGT–2022 conference, the second stage of projects in the gas chemical complex is currently being prepared. It is planned to invite leading Japanese companies to participate in their implementation.
It is noteworthy that large chemical facilities have already been put into operation in Turkmenistan in cooperation with foreign partners in the last four years alone. For example, in the Kiyanly village of Balkan province, there is now a gas chemical complex for production of polyethylene and polypropylene built by LG International Corp and Hyundai Engineering (Republic of Korea) jointly with TOYO Engineering Corporation (Japan) on orders of the State Concern “Turkmengas”.
In the village of Ovadandepe, Akhal province, the State Corporation “Turkmengas” and the consortium of companies made of Kawasaki Heavy Industries Ltd. (Japan) and R"onesans End"ustri Tesisleri Insaat Sana'yi ve Ticaret A.S. (Turkey) built the world’s first plant for production of synthetic gasoline from natural gas. The main product of this unique plant, ECO-93 gasoline, meets EURO-5 environmental standards.
The Garabogazkarbamid plant, the largest enterprise in the region producing 660,000 tons of ammonia and more than 1 million tons of carbamide fertilizers, was built in partnership between the State Concern “Turkmenhimiya”, Mitsubishi Corporation (Japan) and Gap Insaat (Turkey).
All new plants use natural gas as a raw material for production of their products. Turkmenistan’s gas resources are estimated at more than 50 trillion cubic meters. Importantly, a significant part of the products manufactured by these plants goes for exports, providing an additional inflow of foreign currency to Turkmenistan. For example, ECO-93 gasoline is exported to Uzbekistan, Afghanistan, Georgia, and Romania.
As part of the upcoming second stage, projects will be launched to build new similar plants, including a plant in Garabogaz for production of 660 thousand tons of ammonia and 1.2 million tons of urea per year, the second stage of the plant in Ovadandepe for annual production of 600 thousand tons of gasoline from natural gas. According to the Chairman of the State Concern “Turkmenhimiya”, a number of investment projects for construction of modern plants and complexes for deep processing of natural gas, production of nitrogen and phosphorus fertilizers will be implemented in the near future.
During a recent visit to Japan by the Speaker of the Upper Chamber of the Turkmen parliament, Gurbanguly Berdimuhamedov, agreements were reached with Japanese partners on their joining the implementation of new gas chemistry projects in Turkmenistan.
The forum paid equally important attention to projects on transition to renewable energy sources and use of hydrogen technologies. The Ministry of Energy of Turkmenistan together with the Turkish company Chalik Energy presented a project for a new hybrid solar-wind power plant in western Turkmenistan with the capacity of 10 megawatt.
Chairman of the Board of the State Bank for Foreign Economic Affairs of Turkmenistan Rakhimberdi Dzhepbarov called on foreign investors to join a number of “green” projects in the country. He noted that Turkmenistan has a strong potential in the field of hydrogen energy, namely a developed transport network for exports and, most importantly, a resource base with huge reserves of natural gas.
The bank official also said that the country needs large financial injections in the infrastructure for production and storage to establish a hydrogen industry. Turkmenistan works on attracting foreign investment in this process. To this end, it is expected that a hydrogen energy office of the International Renewable Energy Agency will be opened in the country. Speaking about the agreements reached with international structures on financing new projects in Turkmenistan, Dzhepbarov noted that in July 2021 a loan agreement was signed with the Abu Dhabi Development Fund to finance the construction of a 10 megawatt hybrid solar-wind power plant.
Chinese CNPC that so far has been engaged in development of the gas industry in Turkmenistan has also come up as the potential partner of Turkmenistan in the implementation of projects in the field of “green” energy. Speaking at the forum, president of this company Hou Qijun expressed his interest in establishing business relations with Turkmen partners along the entire chain of “green” energy.
“Guided by the principles of mutual benefit, we will share with the Turkmen side the opportunities that the big Chinese market will bring and continue deepening the Chinese-Turkmen cooperation in the field of natural gas, unlocking the potential of cooperation in development of traditional gas fields and working intensively on cooperation along the entire chain of green energy industry to further increase the scale of trade and the scope of cooperation,” the head of CNPC said. According to him, CNPC is ready to strengthen cooperation with “Turkmengas” in such important areas as natural gas and new energy, chemicals and new materials, green and low-carbon investments.
Other than this, Turkmenistan is actively developing foreign business relations within the framework of the Roadmap, adopted in early 2022, for development of international cooperation in the field of hydrogen energy for 2022–2023. This document is aimed at developing an international partnership for establishment of an export-oriented hydrogen energy industry in Turkmenistan, staffed with highly qualified specialists, using modern technologies in its operations.
Thus, Turkmenistan has staked on the deep and comprehensive processing of natural gas. Such an approach will not only help reduce the risks associated with the direct export of raw materials but will also allow the country to significantly diversify the commodity structure of exports through finished gas chemistry products that are in demand in foreign markets. The availability of huge reserves of natural gas in the country will provide the existing and to-be-constructed plants with raw materials for many decades to come. And the favorable geopolitical position of Turkmenistan makes it possible to arrange the supply of gas chemical products both by sea and land transport in various directions of the Eurasian continent.
Speaking at a government meeting that took place right after the oil and gas forum, President Serdar Berdimuhamedov emphasized that strengthening the capacity of the gas chemical industry and increasing gas processing and output should be among the current priority tasks for development of the fuel and energy complex of Turkmenistan. The head of state instructed the leadership of the country’s fuel and energy complex to continue work in this direction.