Turkmenistan: EU Gets Go-Ahead for Gas Talks, But is Ashgabat Ready?
Poland, which currently holds the rotating presidency of the European Union, has obtained preliminary agreement from EU members to give the European Commission a mandate to hold gas talks with Azerbaijan and Turkmenistan, Dow Jones Newswires reported.
Konrad Niklewicz, spokesman for Poland's EU presidency said he had "managed to get the agreement of member countries on a mandate for talks," and a final decision will be made by EU ministers in September. The EU hopes to obtain Turkmen gas for various pipelines that will feed Europe, including the long-stalled Nabucco pipeline.
The European Parliament is expected to vote soon on whether to go ahead with a Partnership Cooperation Agreement with Turkmenistan, stalled over human rights concerns.
For its part, Turkmenistan seems to have blown hot and cold on the EU, sometimes making overtures and seeming to affirm its desire to diversify export routes, then other times pulling back. The announcement from Poland drew no comment from Turkmenistan.
An article by the State News Agency of Turkmenistan (TDH) on the official Turkmen government website published July 14 on the launch of commercial offshore gas production provides a roundup of a number of projects with foreign partners, highlighting the Malaysian gas company Petronas with whom Ashgabat signed a production-sharing agreement in 1996.
In the 15 years since then, Petronas has invested $4.5 billion in offshore and land infrastructure and produced 75 million tons of crude oil and condensate as well as 245 billion cubic meters (bcm) of gas, TDH reported.
On July 12, President Gurbanguly Berdymukhamedov and Malaysian Prime Minister Mohd Najib bin Tun Haji Abdul Razak attended the opening of an industrial complex including a gas processing plant and gas terminal built with support from Petronas. The Turkmen leader praised the major investment Petronas had made in Turkmenistan's capacity to export its hydrocarbons. The gas terminal and processing plant in Kyyanly will treat and export up to 5 bcm of gas per year initially, and is planned to reach 10 bcm.
The TDH article also mentions Arabian Dragon Oil, Germany's RWE and Winterschall, India's ONGC, Austria's Maersk, and Russia's Itera and Zarubezhneft as partners with Turkmenistan in exploring the Turkmen Caspian shelf.
Also mentioned was the Chinese National Petroleum Company and Barren, involved in on-shore development. Russia was noted in passing as a "traditional importer" and "work on the implementation of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project" is under way, said TDH -- evidently as the parties are still attempting to work out an agreement on gas and transit prices.
Chevron and other US companies were not mentioned although it was noted that "a number of foreign oil companies show interest in developing license blocks in the Turkmen sector of the Caspian Sea." The Turkmen leader indicated that US companies could bid on these blocks a year ago and has had meetings with executives, but it is not clear when the projects will be cleared.
As for the EU, "The option of direct natural gas supplies to Europe is under consideration," TDH added tersely.
So while Poland is rounding up the EU members for talks, the message from Ashgabat appears clear -- if it wants a deal, the EU had better come to the table prepared to invest in Turkmenistan's infrastructure in the way in which other long-term partners like Petronas and CNPC have done.
The Turkmen East-West pipeline was noted, now being developed by the Turkmengaz State Concern, with companies from China, Korea and the United Arab Emirates also collaborating. It will connect Turkmen's largest gas fields, including the Southern Yoloten field, said to be the second largest in the world, to outside pipelines.