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Overview of key events in energy sector of Turkmenistan

Oil&Gas Materials 16 July 2023 03:00 (UTC +04:00)
Khayal Khatamzadeh
Khayal Khatamzadeh
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BAKU, Azerbaijan, July 16. The energy sector of Turkmenistan is of strategic importance for the development of the country and ensuring its energy independence. Turkmenistan has significant reserves of natural gas, which makes it one of the largest producers and exporters of this resource in the Central Asian region.

The country's sector continues to develop and modernize, based on the country's strategic resources and the desire for diversification and sustainability. This creates favorable conditions for attracting foreign investment and expanding international cooperation in the field of energy.

According to the semi-annual review prepared by Trend, in the first half of this year Turkmenistan demonstrates growth in the development of its energy sector.

Attracting foreign investment

Deputy Chairman of the Cabinet of Ministers Batyr Amanov reported during a government meeting at the end of June that the Turkmennebit State Concern of Turkmenistan is working to attract foreign investors and companies to the development of licensed areas of the Turkmen sector of the Caspian Sea.

Production of hydrogen from gas

President of Turkmenistan Serdar Berdimuhamedov, during a meeting in Ashgabat with Hungarian Prime Minister Viktor Orban in early June, expressed the opinion that Turkmenistan is ready to consider Hungary's proposals for the production of hydrogen from natural gas. Berdimuhamedov noted that the production of hydrogen from natural gas is currently a promising and very popular direction. In this regard, he suggested instructing the relevant state structures of the two countries to prepare a list of measures to establish cooperation in the energy sector.

Drilling of new wells

Turkmengaz State Concern of Turkmenistan for the period of the end of April was drilling 10 new wells at the Galkynysh field, which is the largest oil and gas field of Turkmenistan with an area of 1842 square kilometers, located in the Mary region of the country.Predictive calculations of development indicators provided for 7 stages of development. As part of the first stage of field development, the operational fund of producing wells was 51 units. The average estimated gas flow rate was 1.5 million cubic meters per day, and the potential of the reservoir allowed for a long time to operate wells with a flow rate of more than 2 million cubic meters per day.

CNPC Investments

China National Petroleum Corporation (CNPC) has invested more than $9.4 billion in Turkmenistan within the framework of the "Bagtyyyarlyk" contract territory. According to company officials, CNPC exports 13 billion cubic meters of commercial gas annually and pays $1.2 billion in taxes to Turkmenistan. In addition, the corporation has already invested $26 million in social projects and created tens of thousands of jobs.

New gas processing plants

South Korean Daewoo E&C in cooperation with the Turkmenhimiya State Concern has been working on projects for the construction of two plants in Turkmenistan, where natural gas is the raw material for production. One of them, according to the plans, was a plant for the production of ammonia and urea with a capacity of 660,000 tons per year and 1,155 tons per year, respectively, which will be located in the Balkan region of the country. The second project is a plant for the production of phosphorus fertilizers with a capacity of 300,000 tons per year on the basis of the Turkmenabat chemical plant in the Lebap region.

Cooperation with the UAE

The UAE Minister of State, member of the Board of Directors of the Abu Dhabi National Oil Company (ADNOC), Abu Dhabi Fund for Development Ahmed Ali Al Sayegh at the forum on attracting investments in the energy sector of Turkmenistan in late April said that the UAE, which has been involved in the energy sector of Turkmenistan for more than two decades, is expanding the presence of its companies in the Turkmen economy through investments.

Plans to increase gas production

Irina Luryeva, head of the laboratory of the Scientific Research Institute of Natural Gas of the Turkmengas State Concern, said at the end of April that the State Concern Turkmengaz of Turkmenistan plans to bring the stable inflow of natural gas from the Galkynysh field to 200 billion cubic meters per year. According to her, achieving such an indicator of natural gas production is possible with the implementation of all 7 stages of operation. She noted that the field is at the stage of pilot operation and in the future the rate of gas extraction will increase, and also added that during the period of continuous selection, it is planned that annual gas production throughout the field will reach about 200 billion cubic meters per year.

Dragon Oil plans

The Chief Executive Officer of Dragon Oil, Ali Rashid Al Jarwan, said at the end of April that company intends to invest at least $8 billion in projects in Turkmenistan in the next 15 years. He noted that for more than 20 years of joint work, the company has invested more than $8 billion in projects for the development of oil fields in Turkmenistan, and is ready to invest at least as much in the next 15 years.

Interest of South Korean companies

Head of the Korea-Turkmenistan Inter-Parliamentary Friendship Group Lee Dal-gon during a meeting with the President of the Supreme Council of Turkmenistan Gurbanguly Berdimuhamedov in mid-April said that South Korean companies are interested in implementing projects in the gas sector in Turkmenistan. According to him, Turkmenistan is a country with huge reserves of natural gas and therefore South Korean companies are interested in implementing projects there.

Reduction of gas imports by Gazprom

Russian Gazprom PJSC bought about 5 billion cubic meters of gas from Turkmenistan last year according to the agreement signed by the parties, Russian Ambassador to Ashgabat Alexander Blokhin said. According to him, Gazprom purchased 10 billion cubic meters of gas from Turkmenistan in 2021. He noted that Gazprom had an agreement on gas supplies with Turkmenistan concluded until 2024, and last year it was extended.

Construction of underground gas storage facilities

Russian companies have shown great interest in the project of construction of underground gas storage facilities in Turkmenistan, Trend reports with reference to the Turkmen media. This was stated by the Deputy Prime Minister of the Russian Federation Alexander Novak. He noted that Turkmenistan and Russia have agreed to continue cooperation in the energy sector and in the modernization programs of the Turkmen electric power system, and also added that, in particular, Russian companies have shown great interest in the project of construction of underground gas storage facilities in Turkmenistan.

Increasing gas supplies to China

Turkmenistan intends to continue working on the implementation of new projects related to increasing natural gas supplies to China, Rashid Meredov, Minister of Foreign Affairs of Turkmenistan, said. He made the remark at the meeting with Hou Qijun, Board member and President at China National Petroleum Corporation (CNPC), who was on a working visit to Ashgabat.

Development of cooperation with Lithuania

Turkmenistan and Lithuania are ready to develop ties in the energy sector. This opinion was expressed during a meeting in Ashgabat of the delegations of Turkmenistan headed by Deputy Minister of Foreign Affairs Vepa Hajiyev and Latvia headed by Vice Minister Mantas Adomenas. The diplomats analyzed the current state of cooperation between the two countries and expressed readiness to intensify it in the energy sector, as well as in such areas as transport and logistics infrastructure, ecology, etc.

Construction of a gas compressor station

Turkmenistan's Turkmengaz State Concern will build a new compressor station on the East-West gas pipeline. Prequalification for the implementation of this plan involves the construction, supply of equipment, and commissioning at the new station. The East-West gas pipeline is one of the key main arteries through which Turkmenistan is creating a single closed gas transportation system connecting the fields in the Mary region with the Caspian hydrocarbon deposits. Thanks to this gas pipeline, Turkmenistan can freely redistribute natural gas between suppliers.

Drilling of a new oil and gas well

A new oil and gas well is being drilled at the Guijik field located in the Balkan region of Turkmenistan of Turkmenistan. Drilling was carried out using a powerful Chinese-made J-30T drilling rig, Russian geophysical seismic equipment that provides 3D viewing of hydrocarbon deposits, as well as thanks to units that are characterized by efficiency and mobility of actions, significantly reducing the time during descent and lifting operations.

Production of gas condensate

Turkmennebit State Concern of Turkmenistan plans to receive a large inflow of gas condensate from the promising Uzynada field, thanks to the commissioning of two new wells in August this year. The state concerned drilled 1.6 kilometers of well No. 74 with a design capacity of 6.8 kilometers in the first 3 months of 2023, and well No. 83 with a similar design capacity reached a depth of 900 meters.

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