Turkmens plan trans-Afghan gas sale deal in May

AP News
Posted: May 04, 2012 6:56 AM
Turkmens plan trans-Afghan gas sale deal in May

Senior officials in Turkmenistan say the energy-rich Central Asian nation plans to sign a natural gas sales agreement with Afghanistan, Pakistan and India later this month.

The deal would mark a decisive move toward construction of a landmark pipeline crossing the four nations that backers hope will meet energy demands across the region.

Two high-ranking officials, who cannot be named as they are not authorized to speak with the media, told The Associated Press this week they expect the agreement to be signed at an energy conference in Turkmenistan late May.

Progress on the project has to date been delayed by disagreement among participant nations on transit fees and the price for the gas.

It has been widely assumed that gas for the more than 1,000-mile (1,600-kilometer) pipeline will be sourced from the Dauletabad field in southern Turkmenistan.

An official from the state gas company said, however, that a portion of the fuel will eventually be drawn from the vast and yet-to-be developed South Yolotan field near the Afghan border.

Independent British auditor Gaffney, Cline & Associates estimates that South Yolotan may hold up to 21.2 trillion cubic meters of gas, potentially making it second largest reserve of gas in the world after the South Pars field, shared between Iran and Qatar.

Another top Turkmen energy industry official told the AP that the first gas is expected to be drawn from South Yolotan in 2013, but that the date could be brought forward to the end of this year in the best-case scenario.

The gas pipeline across Afghanistan, projected to ship 33 billion cubic meters a year, has been actively backed by the United States. It would give Turkmenistan a further export route for its copious energy reserves and generate revenue for Afghanistan. It currently exports to Russia, Iran and China, and also harbors ambitions of selling directly to Europe.

Turkmen President Gurbanguli Berdymukhamedov has said Afghanistan could stand to earn more than $1 billion annually in transit fees. Afghan leader Hamid Karzai predicts maintaining the pipeline could provide employment for 50,000 people in Afghanistan alone.

But many observers remain concerned about the security risks of laying a pipeline across some of the most dangerous parts of Afghanistan and Pakistan's unruly tribal areas.

No details have been disclosed about the selling price for Turkmenistan's gas, but media in Pakistan cited the country's petroleum minister as saying the gas would cost less than was being paid for gas imported from Iran.

While pursuing plans to open up new markets on its immediate border, Turkmenistan is also pushing ahead with expanding capacity for gas transportation routes to China, which traverse neighboring Uzbekistan and Kazakhstan.

Turkmenistan began supplying gas to China through a newly completed pipeline in late 2009. That pipeline and a second route that came online in June is expected to bring full annual capacity to 40 billion cubic meters by 2015.

A Turkmen energy official told the AP this week that third pipeline to China is already in the works, which will enable Turkmenistan to meet the commitments made in 2011 to gradually boost natural gas deliveries to China to 65 billion cubic meters annually.