August 2012

Turkmenistan’s Gas Export Potential: New Implications for Europe

By Vladimir Socor

BP’s latest annual Statistical Review of World Energy has revealed Turkmenistan’s proven gas reserves as even bigger than previously assessed (see accompanying article). From Ashgabat’s perspective, European gas markets must look more lucrative and reliable compared with Turkmenistan’s existing export markets in China, Russia, and Iran (let alone the proposed trans-Afghan export route). The westward direction remains the only missing direction for Turkmenistani gas exports. Turkmenistan has started construction of the East-West pipeline, to run from its eastern gas fields to the Caspian coast, there to connect with a westbound trans-Caspian pipeline. Ashgabat proposes to deliver 30 billion cubic meters (bcm) annually through this line, and another 10 bcm annually from its Caspian offshore fields, for onward transportation to Europe after 2016. Turkmenistan plans to finance the overland pipeline from its own budget, but is running into problems with funding and subcontracting some of the work.