Turkmenistan's energy production
Turkmenistan is recognized as a significant player in global energy production, primarily due to its vast natural gas reserves, which are the largest in the former Soviet Union after Russia. With proven gas resources estimated at 11.327 trillion cubic meters and a production volume of 86.472 billion cubic meters in 2022, Turkmenistan's energy sector plays a crucial role in regional geopolitics. Since the 1970s, the country’s gas infrastructure has developed significantly, including key pipeline networks established during Soviet times that facilitated exports to Russia and beyond.
Following the dissolution of the Soviet Union, Turkmenistan faced challenges, particularly with Russia monopolizing gas exports. However, shifts in global energy dynamics, especially the rise of China and fluctuations in European energy needs, have elevated Turkmenistan's strategic importance as an alternative gas supplier. The country has diversified its export routes, notably the construction of pipelines to China and plans for connections to Europe, although geopolitical tensions have complicated these efforts.
While Turkmenistan is a major gas producer, it remains a minor player in the oil market, and ongoing projects like the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline highlight both the potential and challenges of expanding its energy export capabilities. As the world increasingly seeks to diversify energy sources, Turkmenistan's role in international energy markets is likely to grow, albeit not without obstacles.
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Turkmenistan's energy production
Official Name: Turkmenistan.
Summary: Turkmenistan’s abundant natural gas resources and its geographic proximity to Russia, China, the Caucasus, the Caspian region, the Middle East, and South Asia make this gas-producing nation an important player in energy markets.
Turkmenistan is the largest gas producer after Russia in the former Soviet Union, with proven gas resources of 11.327 trillion cubic meters and a production volume of 86.472 billion cubic meters in 2022. At the same time, Turkmenistan is a marginal player when it comes to oil supplies. Turkmenistan’s gas sector emerged in the 1970s, when the Soviet government initiated the construction of the Central Asian gas trunk pipelines: Bukhara-Ural, Central Asia-Center, and Bukhara-Tashkent-Frunze-Almaty. Moscow directly managed the gas pipeline system, which transported Turkmen gas through the territories of Uzbekistan and Kazakhstan to Russia, Ukraine, the Caucasus, and Europe.
After the collapse of the Soviet Union in 1991, Russia inherited the Soviet-built pipeline network infrastructure as well as a monopoly over Turkmen gas export routes. Its complete control over Central Asian gas exports, as well as low gas prices in external markets, enabled Russia to purchase Turkmen gas as low as five times below European gas prices. Most of this gas was used in Russia’s own subsidized domestic gas market and exported westward, predominantly to Ukraine and some European countries.
In the twenty-first century, the economic rise of China, skyrocketing energy prices, several conflicts between Russia and Ukraine over gas prices, the 2022 Russian invasion of Ukraine, and the transit of gas to Europe boosted Turkmenistan’s geopolitical profile as a potential non-Russian gas supplier. As the dependence of industrialized nations on traditional gas suppliers is projected to increase, their governments have been active in trying to diversify their gas imports. This applies not only to European nations but also to China, which opted to secure pipeline gas from Turkmenistan.
Pipeline Projects
The years of 2007–10 were highlighted by intense geopolitical activity over three Turkmen gas export routes: pipelines to Russia (the expansion of the Central Asia-Center route up to 262 billion cubic feet or 80 billion cubic meters per annum and construction of an additional Caspian Littoral Pipeline with a 65-billion-cubic-feet or 20-billion-cubic-meter capacity); the Trans-Asia Gas Pipeline network to China (98–131 billion cubic feet or 30–40 billion cubic meters); and the Trans-Caspian Pipeline to Europe (98 billion cubic feet or 30 billion cubic meters) sponsored by the European Union (EU) and the United States.
By 2009, the ever-increasing interest of China and the EU in securing Turkmenistan’s gas supplies prompted Russia to offer higher prices for Central Asian gas in order to block Turkmen gas sources from alternative export routes. However, the subsequent global financial crisis led to a decline in European and Ukrainian gas demand and lower gas prices, hindering an expansion of the traditional Central Asian export route via Russia. Moreover, considerable unexpected financial losses forced the Russian energy giant, Gazprom, to cease its intake of Turkmen gas at the border, which caused a buildup of pressure in the Central Asia-Center pipeline and its subsequent rupture on April 9, 2009. In the fall of 2009, Gazprom reached a new deal with Turkmenistan to purchase up to 98 billion cubic feet of gas per year. However, if Gazprom was to purchase 164 billion cubic feet of Turkmen gas in 2009, in 2010, this figure went down to 36 billion cubic feet. The nine-month delay of Turkmen gas supplies to Russia, as well as lower export volumes purchased by Gazprom, forced Turkmenistan to seek access to new gas markets, such as China, Iran, India, Pakistan, Afghanistan, and potentially Europe.
Turkmenistan’s traditional dependence on a single gas export route via Russia was broken with the unveiling of the Chinese export route in the fall of 2009. Ashgabat shipped 11.4 billion cubic feet (3.5 billion cubic meters) of its gas to China in 2010, which was expected to reach 42 billion cubic feet (13 billion cubic meters) in 2011 and between 98 and 131 billion cubic feet in 2012–13. In 2022, Turkmenistan exported more than 1.5 trillion cubic feet (44.567 billion cubic meters) of gas.
In addition to the Chinese pipeline project, Turkmenistan reached a deal with Iran on the construction of the Dovletabad-Serakhs-Khangeran Pipeline, alongside the already existing Korpedzhe-Kurtkui Pipeline. The project increased Turkmen gas exports to Iran by up to 20 billion cubic meters per year. Moreover, Turkmenistan can supply gas to Europe via a proposed underwater Trans-Caspian gas pipeline. However, Russia and Iran opposed this pipeline’s construction on environmental grounds.
Turkmenistan also sought to provide gas volumes to a Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. However, this pipeline project appeared to be problematic, with geopolitical and security concerns over its safety as well as potentially high gas costs at the receiving end. Construction was stalled as of 2023.
Bibliography
Chow, Edward C. “Central Asia’s Pipelines: Field of Dreams and Reality.” In Pipeline Politics in Asia: The Intersection of Demand, Energy Markets, and Supply Routes. Seattle: National Bureau of Asian Research, 2010.
Pirani, Simon. “Turkmenistan: An Exporter in Transition.” In Russian and CIS Gas Markets and Their Impact on Europe, edited by Simon Pirani. New York: Oxford University Press, 2009.
Putz, Catherine. "Energy in Central Asia: Who Has What?" The Diplomat, 15 June 2017, thediplomat.com/2017/06/energy-in-central-asia-who-has-what/. Accessed 9 Aug. 2024.
"Turkmenistan." CIA World Factbook, 7 Aug. 2024, www.cia.gov/the-world-factbook/countries/turkmenistan/www.cia.gov/library/publications/the-world-factbook/geos/tx.html. Accessed 9 Aug. 2024.
"Turkmenistan." International Energy Agency, 2024, www.iea.org/countries/turkmenistan. Accessed 9 Aug. 2024.