Prospects for Turkmen gas to Europe « Caspian Research Institute

Prospects for Turkmen gas to Europe « Caspian Research Institute:



"As the construction of the Russian-backed South Stream project continues to face regulatory problems with the European Union, analysts ponder how to make the Southern Gas Corridor viable. The current plan is to send 10 billion cubic meters (bcm) of natural gas from Azerbaijan to Italy and Greece. This will meet approximately 2% of Europe’s current import needs. To expand the pipeline, other sources of natural gas need to be found. One that is frequently mentioned is Turkmenistan, holder of the world’s fourth largest deposits of natural gas. The British auditing firm of Gafney, Cline and Associates released a report in May 2011 that stated the South Yolotan natural gas superfield, discovered in 2006, contained more than 20 trillion cubic meters of natural gas, enough to satisfy European demand for more than 50 years.



Bilateral trade relations between the European Community and Turkmenistan are governed by an interim trade agreement negotiated in 1998, and approved by the European Parliament in April 2009. The first serious discussion about Turkmen gas was the 2004 Baku initiative that tried to integrate the energy markets around the Black and Caspian seas. In March 2007, the European Council held two days of meetings in Brussels in which they agreed to strengthen cooperation with Central Asian countries in the field of energy. In June 2007, the Council expressed the intent of the European Union to comprehensively support Central Asian countries in developing a Caspian-Black Sea-EU energy transport corridor. Then, in an April 2008 Memorandum of Understanding between the European Commission and Turkmenistan, Ashgabat expressed a willingness to reserve 10 bcm per annum for Europe.



European chances of seeing Turkmen gas improved in April 2009. Gazprom unilaterally cut its imports of Turkmen gas, causing a drastic drop in the pressure in the Central Asia-Center pipeline. This caused the pipeline to explode, depriving Turkmenistan of its major export market. Imports were resumed in January 2010, but at significantly reduced levels. Originally, Turkmenistan was sending Russia 42-45 bcm per annum, but the new levels were closer to 10 bcm (and at lower prices.)"



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