Page 6 - FSUOGM Week 07 2022

FSUOGM COMMENTARY FSUOGM

Turkmenistan: Lifeline D

Bargaining with China, selling to Tajikistan and vodka inflation. This and more

in Eurasianet’s weekly Turkmenistan briefing.

TURKMENISTAN TURKMENISTAN’S economy is deeply Engineering Company Limited, or CCDC, has
dependent on China, that is in little doubt. been building wells, pipelines and processing
Beijing is by very far the biggest buyer of plants for Galkynysh since the late 2000s. As the
Turkmen natural gas; imports hit 34bn cubic CNPC pointedly notes on its website, the field
metres (bcm) in 2021. Russia is a distant run- is a complicated proposition because the gas
ner-up, having bought 10bcm of gas last year produced there has a high sulfide content and is
– that itself being a surprising doubling of the accordingly complicated to handle.
volume purchased in 2020. This symbiotic relationship persists to this
None of this means that Turkmen President day, despite Ashgabat’s faltering attempts to
Gurbanguly Berdimuhamedov is past haggling diversify its contractors. In August, a ceremony
for better prices. was held to mark the construction of three new
The subject of gas fees came up on February wells at Galkynysh. The contract to do the work
5, when Berdimuhamedov met in Beijing with was, as ever, given to CCDC. Those three wells,
his Chinese counterpart, Xi Jinping. The Turk- which are being built over a 30-month span, are
men president was among a select smattering of to supplement the 45 existing wells at the field.
national leaders to attend the ceremonial open- The contract had originally been awarded to
ing of the Winter Olympics. Dubai-based Gulf Oil & Gas International FZE,
Berdimuhamedov’s initial gambit was to raise but it was then discontinued for reasons unclear.
the matter of the forthcoming second develop- By all appearances, it came down to money.
ment phase of Galkynysh, which is believed to be Turkmen media previously reported that pay-
the world's second-largest gas field. There can be ment for the new wells was to be made to CNPC
little doubt China’s CNPC will be doing much of in the form of gas deliveries, thereby freeing
the legwork there, although the Turkmen leader Ashgabat of the need to tap into hard currency
tried to play it coy on this point. reserves.
But first some history. Returning to the present, Berdimuhame-
State gas company Turkmengaz is ostensi- dov told Xi that gas produced in this new phase
bly the operator of the Galkynysh project, but should be delivered through a projected fourth
the money and technical expertise has always strand of the Central Asia-China pipeline, also
been predominantly Chinese. Turkmenistan known as Line D. Whenever this phantomatic
received a $3bn loan from the Chinese Develop- fourth route, for which 30bcm of annual capac-
ment Bank to develop Galkynysh in 2009, and ity has been proposed, has been spoken of in the
then, two years later, it got an additional $4.1bn past, it has always been on the understanding
tranche. that it would pass through Kyrgyzstan, Tajik-
That money has over the years been repaid istan, Uzbekistan.
in the form of gas exports and was, in any case, In any case, Berdimuhamedov is eager to
being funnelled straight back to state-owned get his ducks in a row this time around. “In the
Chinese companies. course of future cooperation on implemen-
CNPC-affiliated Chuanqing Drilling tation of a fourth line construction project, it

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