25 September 2017
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  • » 03/13/2017, 18.38

    TURKMENISTAN

    As the construction of Turkmenistan’s largest pipeline is halted, the country’s crisis worsens



    Line “D” would have crossed Uzbekistan, Tajikistan and Kyrgyzstan before reaching China. It was set to deliver 30 billion bcm of Turkmen gas to China per year.

    Ashgabat (AsiaNews/Agencies) – The construction of Turkmenistan’s largest gas pipeline has been halted until further notice.

    Line "D" of the Turkmenistan-China gas pipeline network was supposed to link producer to consumer, via Uzbekistan, Tajikistan, and Kyrgyzstan until reaching north-western China.

    Neither of these Central Asian countries was going to receive any gas, but they would have taken in millions of dollars in transit fees.

    Line D was supposed to carry some 30 billion cubic metres (bcm) of gas annually to China. Lines A, B, and C all go through Uzbekistan and Kazakhstan, also gas-producing countries, before reaching China. Both of the former have contracts with Beijing.

    The construction of Line D was suspended after years of trying to reach an agreement between the countries party to the deal.

    On 2 March, the China National Petroleum Corporation and Uzbekneftegaz indefinitely postponed construction of the pipeline on Uzbekistan's territory.

    In 2014, it was clear that there were problems in Kyrgyzstan and Tajikistan with forming joint ventures with Chinese companies to build and operate the pipeline, and some disagreements over the route.

    For Turkmenistan, the decision not to build the D line is a blow that aggravates the country’s economic crisis, the worst in 25 years.

    The Central Asian country depends heavily on gas exports, whose prices have plummeted in the last three years, depressing its economy. To develop its gas fields and build the pipelines to China, Turkmenistan borrowed billions from China.

    Worse still, Russia cancelled its contract for Turkmen gas because Ashgabat was demanding US$ 240 per 1,000 cubic metres. Russian gas giant Gazprom renegotiated deals with Kazakhstan and Uzbekistan, agreeing to pay the latter about US$ 140 per 1,000 cubic metres.

    Finally, earlier this year, Iran too cancelled its contract for Turkmen gas and started to invest in domestic electricity production, so that it is likely that it will no longer need to import Turkmen gas next year.

    All this leaves Turkmenistan with only China as a customer.

    It is always difficult to find reliable figures on Turkmenistan's gas industry – Turkmenistan is thought to have exported some 30 bcm of gas to China in 2016. The price Beijing for it is said to around 5 per 1,000 cubic metres of gas

    Turkmen President Gurbanguly Berdimuhamedov has often spoken about plans to reviving the country's economy. Among his plans is the construction of a gas pipeline that links Turkmenistan, Afghanistan, Pakistan and India (TAPI).

    That pipeline is expected to carry 33 bcm of gas. Turkmenistan says it has started construction of its segment of TAPI, though there is no proof of it so far. Pakistan claimed to have started its section in early March.

    Berdymukhammedov has boldly predicted construction of TAPI would be completed in 2019, but Pakistan said at the end of January that it would be delayed by at least one year.

    That leaves some 700 kilometres of Afghan territory between them, and the proposed route would run through areas where there is frequent and heavy fighting.

    No one even talks about the Trans-Caspian Pipeline anymore. That was supposed to carry some 30 bcm of Turkmen gas west toward Europe.

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