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Asian Companies To Develop Largest Turkmen Gas Field

A gas pipeline under construction in Turkmenistan.
ASHGABAT -- Turkmenistan has signed agreements with a number of Asian companies to develop the South Yolotan natural-gas field, the largest in Turkmenistan, RFE/RL's Turkmen Service reports.

Turkmen President Gurbanguly Berdymukhammedov on December 29 authorized the state company TurkmenGaz to sign contracts worth a total of some $10 billion with companies from China, South Korea, and the United Arab Emirates (U.A.E.).

China's CNPC Chuanqing Drilling Engineering Company will drill wells that are expected to yield up to 10 billion cubic meters of gas a year, under the terms of a contract worth over $3 billion.

The U.A.E.-based Petrofac International is expected to build sweet-gas plants with a capacity of 10 billion cubic meters of commercial gas annually and a complex of plants to produce up to 20 billion cubic meters of gas a year, for a total of nearly $4 billion.

The U.A.E.-based Gulf Oil & Gas FZE will build infrastructure with a capacity of up to 20 billion cubic meters, for $1.15 billion.

South Korea's LG International and Hyundai Engineering will also construct sweet-gas plants with an annual capacity of 10 billion cubic meters of commercial gas, under the terms of a contract worth some $1.5 billion.

Turkmen state media report that all the South Yolotan projects will be funded by the China Development Bank.

Andrei Grozin, the head of the Central Asia department at the Institute of CIS Countries in Moscow, told RFE/RL that currently long-term energy investment projects such as South Yolotan are the prerogative of China, Japan, Korea, and some Middle Eastern countries.

Grozin said Berdymukhammedov would have preferred to secure Western investment, because it is more reliable and brings additional benefits in the form of new technologies, know-how, and access to Western markets.

But, Grozin added, Western and Russian companies prefer to invest in either domestic or profitable short-term projects. Grozin added that Berdymukhammedov therefore had to agree to what was offered.

The signing of the contracts to develop South Yolotan comes two weeks after the official launch of a pipeline from Turkmenistan's Saman Depe field on the right bank of the Amu Darya River to China.

That 1,833-kilometer pipeline, which will start to operate at full capacity in 2012, is expected to transport 40 billion cubic meters of Turkmen gas to China annually for 30 years.

An internal pipeline will reportedly also be built linking South Yolotan and Saman Depe.

Turkmenistan has the fourth-largest gas reserves in the world. According to the British advisory company Gaffney, Cline, and Associates, gas reserves at the South Yolotan field are estimated at some 14 trillion cubic meters.