Turkmenistan to maintain pragmatism in energy issues

Presidential elections, which were held in Turkmenistan on Sunday, will not affect policy of pragmatism in the energy issues chosen by the government in recent years and multipolarity of sale markets, local experts in Ashgabat and international observers believe.

"In any event, practically all the candidates in their programs talked about confidence in the policy pursued by him and the need to arrange export of Turkmen energy resources to the world markets at the most beneficial alternative routes," a representative of a foreign company operating in the country, said.

According to a report of British Petroleum (BP), Turkmenistan ranks fourth in the world after Russia, Iran and Qatar for its natural gas reserves. The country's major fields are concentrated in the east of the country, "Southern Yoloten - Osman" (recently merged and renamed as "Galkynysh") and Yashlar field with total resources estimated by local geologists and British GCA at 26.2 trillion cubic meters.

In turn, as a representative of international organization, accredited to the country, said, the development of oil and gas industry in the country, given the global natural gas reserves will remain a priority.

He believes that the priority directions of fuel and energy sector development, as before, will be:

- Development and certification of fields for oil and gas search and production, while onshore ones will remain in the competence of local core state-owned company;

- foreign participation with investment portfolio will be welcomed when developing expensive fields in the Turkmen sector of the Caspian Sea;

- in creating infrastructure in pipelines system, facilities and communications special attention will be paid to building "East-West" gas pipeline within the country, which enables to bring the resources of the Caspian Sea closer;

- finally, work will intensify in the diversification of the industry due to a growth in oil and gas processing products, especially on liquefied gas and its supply by alternative ways.

Turkmenistan prepares to reconstruct oil-refining enterprises and build a number of new ones. At present, Turkmenistan implements projects for supply of fuel resources to the international markets, including on the construction of a second additional branch of Turkmenistan-China gas pipeline. Work has been intensified within the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. At the same time, unpredictability of the situation in the Afghan territory somewhat postpones the implementation of the project.

"Ashgabat is still in search of better prices, and will focus on access to the European markets," a Turkmen economist said recalling that the most attractive is a project of supply through seabed through Azerbaijan and Turkey to Europe.

Recently, Turkmen government sources reported that in 2012 Ashgabat outlined plans to intensify negotiations with neighboring countries on the Caspian region. The question is about issues related to advancement and realization of international initiatives on the Caspian Sea, put forward by Turkmenistan. These proposals, according to the report, are "aimed at conservation, augmentation and rational use of biological resources of this unique natural reservoir, ensuring its ecological safety, as well as development of constructive regional cooperation".

According to experts, to some extent, ecological component and substantiation of security issues in the implementation of the Trans-Caspian gas pipeline should bring the project implementation time closer and open the way to more detailed negotiations with buyers in Europe.

A representative of the energy sector in Ashgabat said that "option of boosting cooperation in a northern direction is also relevant given that the arsenal has time-tested existing pipeline capacity Central Asia-Center (CAC)".

"Much depends on reciprocal steps by Russia," he said.

Turkmenistan is a long-standing traditional partner of Russia in many spheres of cooperation, and of course, especially in the fuel and energy sphere, Russian Prime Minister Vladimir Putin said at his meeting with President Berdimuhammadov, who paid a working visit to Moscow in December 2011.

Then Turkmen President expressed his confidence that "this meeting will serve as another opportunity to discuss the prospects for the future".

Russia gets Turkmen gas through the Middle Asia - Center gas pipeline through Uzbekistan and Kazakhstan. This communication was commissioned in late 1960s with a capacity of up to 80 billion cubic meters per year. "Gazprom" (Russia) is a customer. It signed the agreement on gas supplies with Turkmenistan for 25 years in 2003.

At present, however, the Middle Asia - Center gas pipeline does not work at full capacity.

Russia stopped importing Turkmen gas in April 2009 because of an accident. The technical issues were resolved, but under the influence of the global recession in 2010, Russia reduced the purchase up to 10 billion cubic meters of gas, or 4 times less than in 2008. This year it became possible to supply Russia with raw materials not only from the eastern fields of Turkmenistan, but also from the west - thanks to the construction of a connecting branch from the Caspian Sea coast, where Petronas can begin industrial gas production on the offshore block.

Turkmenistan and Russia with the participation of transit Kazakhstan earlier talked about a new project with a capacity up to 30 billion cubic meters a year. In this regard, the Russian, Kazakh and Turkmen Presidents signed the agreement on the gas pipeline construction in May 2007.

Senior Russian officials have previously stated that the agreement was made to freeze the project, but Turkmenistan said that these negotiations were not conducted.

Western senior officials also display interest in Turkmenistan, to processes in the country, including in the political sphere.

U.S. Assistant Secretary of State for South and Central Asia Robert Blake said during his meeting with President Berdymuhammadov in December 2011 that "this important social and political action will be a good opportunity to demonstrate achievements of democratic, political and socio-economic reforms in Turkmenistan".

Turkmen media outlets reported that the topic of presidential elections was also discussed by the OSCE Secretary General Lamberto Zannier, who arrived in Ashgabat in November to attend the energy conference.

The West takes a great interest in plans on supply of Turkmen gas to the European markets through the Caspian Sea.