Turkmenistan gas – if you want to prosper, build pipelines

In 1935, twenty-eight horse riders on their famed Akhal-Teke horses, embarked on an endurance race from Ashkhabad to Moscow. Through rugged terrain including the Karakum Desert and forests, the 4,330 kilometre race took eighty-four days to complete. Traditionally, the Turkmen were desert nomads and they had to negotiate difficult terrain on their Akhal-Teke horses. More than 2,000 years ago, these horses were in high demand when the Chinese emperors tried to secure horses for their own army.

Horses have a special place in Turkmenistan culture and the current president, Berdymukhamedov has authored several books on the subject. The latest addition to the Marble City (as Ashgabat is known) in Ashgabat, is a massive 21 meter gold-leaf statue of the president. However, today it is gas not horses that is in demand in Turkmenistan. There is a Chinese saying “if you want to prosper, first build roads”, but in the case of Turkmenistan, it is pipelines.

Turkmenistan has traditionally exported their gas to Russia, but since the collapse of the Soviet Union, things have changed. Turkmen gas, mainly from the Saman-Depe field, accounts for about half of China’s annual gas imports. Ashgabat plans to more than double these exports by 2020.

The much debated Turkmenistan-Afghanistan-Pakistan-India Natural Gas Pipeline (TAPI) project aims to export natural gas through a proposed 1,800-kilometre pipeline. Pakistan and India will each receive 42% of that volume, and the remaining gas will be sold to Afghanistan. TAPI is estimated to export up to 33 billion cubic meters (bcm) of natural gas per year.

However, some analysts view the proposed project as a pipe dream. The Pakistani and Indian governments have given no indication that they are willing to pay for the pipeline. Experts believe that the main obstacle remains the security concerns around the transit countries of Afghanistan and Pakistan. However, Turkmenistan insists that the $10 billion pipeline will go ahead.

Beyond TAPI, European markets also hold great potential. Currently, Europe imports around 30% of its gas from Russia. With the Crimean and Ukrainian tensions brewing, the EU is eager to minimise the risk of Russian gas. The Trans-Caspian Gas Pipeline project is regarded as the optimal option for delivering Turkmen resources to European markets. The project foresees the laying of a gas pipeline, approximately 300 kilometres long, under the Caspian Sea to the shores of Azerbaijan. From Azerbaijan, the Turkmen gas may then be delivered to Georgia and connect to the Trans-Anatolian Natural Gas Pipeline (TANAP) in Turkey.

With the P5+1 Iran deal taking shape, there has been mention of building a pipeline from Turkmenistan through Iran and towards Europe. Iran sits atop the world’s largest gas reserves and Turkmenistan the fourth largest. However, Moscow’s influence in the region could be a major factor. In the end, politics, logistics and security might prove more difficult that taking on the Karakum Desert on horseback.

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