Turkmenistan’s unwavering commitment to political and economic stability, underpinned by a robust legal framework that adheres to international principles, has firmly established the country as a reliable and attractive partner for energy cooperation and investment. This was emphasized by Maksat Babayev, Minister of State and Chairman of Turkmengaz State Concern, during his address at the Turkmenistan Oil and Gas 2024 (OGT) conference.
The three-day OGT 2024 conference, themed “Reliable, Sustainable, and Clean Energy,” started in Ashgabat on Wednesday. The event serves as a pivotal platform for industry leaders, experts, and investors to discuss the latest developments and opportunities in Turkmenistan’s energy sector.
The impressive turnout of over 800 delegates from 51 countries at the OGT conference underscores Turkmenistan’s increasing appeal as an investment destination for foreign companies. This surge in interest can be attributed to the favorable political, economic, and legal environment driven by Turkmenistan’s open-door policy, fostering equitable and mutually beneficial partnerships on the international stage.
As noted by Maksat Babayev during his address at the plenary session titled “New Trends in the Global Energy Market and Prospects for Mutually Beneficial Cooperation,” Turkmenistan’s commitment to these principles has created a conducive environment for foreign investors seeking to participate in the country’s energy sector.
Here are the key statements from the presentation of the Chairman of the Turkmengaz:
Gas and oil reserves: Turkmenistan’s hydrocarbon resources are estimated at more than 71 billion tons of oil equivalent, including 20 billion tons of oil and more than 50 trillion cubic meters of natural gas, according to these figures, Turkmenistan currently ranks fourth in the world in proven natural gas reserves after Russia, Iran and Qatar.
This fact imposes a responsibility on Turkmenistan as a reliable supplier of environmentally friendly energy.
Renewable energy: The move towards greener energy is no longer a side issue, it has become a major issue for producer states, carriers, industries and consumers. Turkmenistan pays great attention to the environmental aspects of the development of hydrocarbon resources and actively develops the renewable energy sector.
Currently, there is an active transition to renewable energy sources. According to the International Energy Agency, the share of renewable energy sources in meeting global energy demand will continue to grow rapidly.
Due to the increase in the share of renewable energy sources, natural gas is currently a cost-effective option to solve the problem of supply disruptions, being a suitable alternative, both from the point of view of ecology and the technological chain.
Turkmenistan’s Methane Reduction Efforts Yield Results: At the COP28 in Dubai, President of Turkmenistan Serdar Berdimuhamedov announced country’s accession to the global methane pledge and further continuation of cooperation with international organizations and government partners, within the framework of existing projects and programs aimed at the practical implementation of the conditions arising from GMP.
Turkmenistan actively cooperates and consults with key international organizations on reducing methane emissions, including with various UN agencies on this important issue.
A few days ago, KAYRROS published a report “Global Methane Pledge – Three years On: Partial progress report”, which states that the total methane emissions in Turkmenistan from its eastern and western producing regions, despite short-term growth in 2021, have a downward trend from that peak, even though oil and gas production is growing.
Total emissions in 2023 decreased by 10% compared to 2020, which is more than the 9% conditional reduction required to move towards the 2030 goals.
Giant Galkynysh field – negotiations are underway on the development Phases II and III
The total reserves of the Galkynysh field, together with the reserves of the Yashlar and Garakel fields, are estimated at 27.4 trillion cubic meters. Currently, Galkynysh is at the stage of pilot operation as part of the Development Phase I.
The State Concern Turkmengaz is actively negotiating with international investors on Phases II and III. Turkmenistan expects a breakthrough in this issue by the end of the 1st quarter of 2025.
Turkmen gas in the Chinese market: It is not enough to explore and extract hydrocarbon reserves, they must be brought to global markets through gas pipelines.
The Turkmenistan-China main gas pipeline, which was put into operation at the end of 2009, includes 3 parallel lines running along the Turkmenistan-Uzbekistan-Kazakhstan-China route. This is a vivid example of mutually beneficial transnational cooperation.
Gas consumption in China is growing. According to the agreements reached earlier, the supply of Turkmen natural gas to China should increase to 65 billion cubic meters per year, after the commissioning of the Line 4 of the gas pipeline.
The new Line to China will be laid from the borders of Turkmenistan through the territory of Uzbekistan, Tajikistan and Kyrgyzstan.
To ensure supplies of an additional 25 billion kilometers per year to China, it is planned to commission the development Phase II of the Galkynysh field.
As part of the development Phase I, Petrofac, CNPC, Hyundai Engineering have constructed and quipped commercial gas treatment facilities. Chuantsin Drilling engineering company under CNPC has drilled 22 production wells. This year, CNPC completed work on the project of 3 particularly complex wells at Galkynysh, which are located in the eastern part of the Phase I.
Negotiations and discussions regarding the specifics of the drilling contract and the initiation of Phase II are nearing completion.
Gas exports to Uzbekistan: Since the beginning of 2024, 1.6 billion natural gas has been exported to Uzbekistan from Turkmenistan.
Swap via Iran: On 19 October 2024, a Memorandum of Understanding in the field of energy cooperation was signed between the Turkmengaz Concern and the Ministry of Electricity of the Republic of Iraq. According to the memorandum, swap deliveries via Iran to Iraq are expected.
Opportunities for international investors in investment projects of the state concern “Turkmengaz”:
Babayev highlighted the following areas of potential partnership with international investors:
• Investment projects to optimize gas production in mature fields
• Investment projects on chemical utilization of oil and gas
• Construction of underground gas storage facilities
• EPC contracts for large industrial projects.
Investors are offered several types of mutually beneficial cooperation, including service contracts for certain types of work – in the mining, processing, construction, oil and gas and chemical industries, the creation of joint service companies for the maintenance and repair of oil and gas equipment such as gas turbines, compressors, pumping equipment.
In addition, the head of Turkmengaz drew the attention of international investors to Phase III ofthe Galkynysh field, which will be a source for the supply of 33 billion cubic meters of commercial gas per year under the TAPI international gas pipeline project.
Key factors driving the growth of Turkmenistan’s attractiveness for foreign investors, include its stable economic and political landscape, robust legislative framework, and unwavering state guarantees. As Minister of State Maksat Babayev emphasized, “Turkmenistan’s energy policy is grounded in the principles of neutrality and multi-vector cooperation. We extend an open invitation for mutually beneficial partnerships to all interested parties.” ///nCa, 23 October 2024
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