This first of four articles on Turkmenistan features an outsider's perspective. Separately, three consecutive articles featuring an official Turkmen perspective will appear in the Exploration & Development section in the issues of Oct. 14, 21, and 28.
Turkmenistan is an important natural gas and oil-producing former Soviet republic of Central Asia whose potential is significant but constrained by a lack of certainty in hydrocarbon export options.
Turkmenistan's energy base is dominated by abundant natural gas, as the state possesses about 5% of proven reserves of the former Soviet Union, second only to Russia. Western sources peg Turkmenistan's proven gas reserves at around 2.9 trillion cu m, placing the country 11th in the world, just behind Iraq.1
Turkmenistan produced 47.9 billion cu m (bcm) of gas in 2001, a significant increase of 9.1% from the previous year and a remarkable 125% from 1999 levels. Most of Turkmenistan's gas-condensate fields are in the eastern half of the country, with the largest fields in the Amu Dar'ya region. Half of the country's gas reserves are concentrated in the giant Dauletabad-Donmez fields complex (formerly Sovietabad), located along the Iranian border.
The US Department of Energy estimates Turkmenistan's proven oil reserves at 546 million bbl, in line with other Western estimates. Oil production is primarily from the fields on the Cheleken Peninsula, although there is also some condensate from the huge gas fields in the western part of the newly independent state. More than 20% of Turkmenistan's oil reserves are under production.
Oil output from Turkmenistan dropped steadily from 1990 to 1995, when it reached 4.1 million tonnes. Since then, however, production has risen, reaching 8 million tonnes last year, or a jump of 12% over 2000. That rise notwithstanding, slightly more than a decade after Turkmenistan's independence, the country's oil output remains a fraction of what it was during the Soviet era.
As with oil, Turkmenistan's gas production declined through much of the 1990s, though at a much more dramatic pace. In 1990, gas output was 81.9 bcm; this fell to 30.1 bcm by 1995 and to 12.4 bcm in 1998. Turkmenistan lost its position as the second largest gas producer in the FSU to Uzbekistan in 1994. By 1999, Turkmen gas production had rebounded to 21.3 bcm, then 43.8 bcm in 2000, and 47.9 bcm last year.
As with oil, these output levels are far below what Turkmen President Saparmurat Niyazov had earlier predicted. In 1993, for example, the government forecasted gas production of 130 bcm by 2000. This forecast was scaled back in 1996. As for oil, in December 2000 Niyazov had projected oil production would reach 10 million tonnes in 2001.
Export constraints
The dramatic drop in gas output in Turkmenistan during the 1990s resulted mainly from output restrictions imposed because of overdue debts for Turkmen gas exported to other FSU countries, particularly Ukraine. Additional reasons included a general lack of funds and equipment due to the demise of the Soviet system and the lack of a solvent market for Turkmen gas.
Turkmenistan still blames Russia for a recent decline in gas export revenues, owing to Russia's decision to cease paying hard currency for Turkmen gas transported across the country. Adding to this situation, many former Soviet states that receive natural gas from Turkmenistan via Russia already owe significant amounts of money to Turkmenistan.
Turkmenistan is presently almost entirely reliant on the Russian pipeline network for gas exports to foreign markets, posing a tremendous hardship for Ashgabat. Gas output levels will thus continue to be influenced by relations with Russia and conflicts over tariff rates.
A 150 km, 8 bcm/year capacity gas pipeline to Kurt-Kui, Iran, from western Turkmenistan's Korpedje field was opened in 1997, allowing for some gas exports to Iran and neighboring Armenia. But gas exports to Iran have generally fallen short of early predictions, in part due to wrangling over prices.
About 4 bcm of gas was reportedly sent to Iran in 2001; 6.5 bcm is expected to be exported this year.
With the availability of the pipeline to Iran, Turkmenistan has agreed to supply nearby Armenia with 2 bcm/ year of natural gas through Iran. A 141-km pipeline will be built from Iran to Armenia, of which 100 km will be in Iranian territory. Armenia and Iran signed an agreement on the construction of the pipeline in December 2001. Further discussions on Turkmen gas supplies to Armenia were held in Yerevan in March between the presidents of the two countries.
As for Turkmen gas exported to Russia, in December 2001 President Niyazov signed a protocol of intent with Russian firms Zarubezhneft and Itera Group to develop oil and gas deposits in Turkmenistan and proceed with a contract on the sale and purchase of 10 bcm of Turkmen gas by Itera in 2002. Zarubezhneft and Itera have established a joint venture to pursue oil and gas investments in Turkmenistan. Zarubezhneft is a 100% state-owned firm that focuses on investments abroad. Formed in 1992, Itera has converted from a commodities trader to a major independent gas producer and supplier in the FSU. About 80% of Itera's business is in the production, transportation, and marketing of natural gas.
Other countries that receive supplies of gas from Turkmenistan include Ukraine, which is slated to import 34 bcm of gas in 2002. Turkmenistan delivered about 30 bcm of gas to Ukraine in 2001. In accordance with a long-term contract signed by the presidents of Turkmenistan and Ukraine, Turkmenistan will supply 250 bcm of gas to Ukraine during 2002-06, reducing Ukraine's heavy dependence on Russian gas.2
Ukraine and Turkmenistan currently are working out arrangements for Ukraine to restructure its $270 million gas debt to Turkmenistan, which includes partial payment in goods and services.
Industry structure
To boost production and enhance efficiency of operations, in 1998 Niyazov signed a resolution paving the way for restructuring of the hydrocarbon activities of the Ministry of Oil and Gas Industry into five state-owned companies.3
Turkmenrozgaz, in which the Turkmen state is the majority owner (with a 44% stake owned by Russia's OAO Gazprom), is responsible for gas exports through Russia. Turkmenneftegaz is responsible for oil and gas marketing. Oil production in the country is carried out by Turkmenneft. Oil and gas facilities construction is the responsibility of Turkmenneftegazstroi, while Turkmengeologia undertakes geological studies.
In February 2000 Turkmenneftegaz's responsibilities were expanded by decree to include purchasing and delivering goods and equipment necessary for exploring, producing, refining, storing, transporting, and selling Turkmenistan's hydrocarbon resources. State-run concerns and corporations must submit applications for equipment and goods, to be analyzed by a special commission of representatives of Turkmenneftegaz, the fund for the development of the oil and gas industry, and other state corporations involved in the oil and gas sectors.
The Law on Hydrocarbon Resources, adopted in March 1997 and approved by Turkmenistan's Parliament, provides a detailed legal framework for undertaking oil and gas activities in Turkmenistan. Under this law, three types of licenses can be issued on the basis of tender results or direct negotiations: an exploration license, an extraction license, and a single exploration and extraction license.4
Foreign companies can establish both production-sharing agreements (PSAs) and joint-venture agreements in the country. In accordance with the hydrocarbon law, a Competent Body for the Use of Hydrocarbon Resources (CBUHR) has been authorized by the country's cabinet of ministers with a mandate to designate blocks for foreign investors and issue PSAs. The deputy prime minister of the country is currently chairman of this body.
Foreign investment
Future flows of gas and oil from Turkmenistan will depend in part on the levels of available international capital and technology assistance. The requirements of Turkmenistan's oil and gas industry for capital investment during 2001-10 are projected at $25 billion, while the market for oil and gas services is estimated at over $7.5 billion over the same term.
Turkmenistan has expressed a particular interest in attracting foreign companies into Caspian offshore exploration,5 infrastructure development, and enhanced recovery projects. The country presently has 32 Caspian Sea blocks out for tender, although international companies generally are unwilling to consider any blocks that lie in or near areas where there are disputes with Azerbaijan and Iran. Despite these concerns, Germany's Wintershall AG has a longstanding interest in Caspian prospects, and Malaysia's Petronas is expected to drill two wells at a cost of $20 million each by yearend on its Turkmen Livanov block after promising earlier results.6
Turkmenistan is also pursuing options to construct a pipeline that would directly access hard-currency markets and avoid Russian territory. Turkmenistan, like the other Central Asian republics, is working with foreign investors to build new pipelines and establish new oil and gas flows to European markets by way of Turkey, Iran, Iraq, or possibly Georgia.
Niyazov supports a plan to build a 1,500 km gas pipeline linking Turkmenistan to Pakistan by way of Afghanistan. Niyazov believes the trans-Afghanistan project would help bring stability to Afghanistan, through which 764 km of the line would run. The Turkmen leader believes the gas pipeline would bring 12,000 jobs to Afghanistan and provide an annual transit income of $300 million.
The proposed $2 billion pipeline would have throughput capacity of up to 30 bcm/year. The project was originally due to start by yearend 1998 but was derailed by civil strife. In July the Manila-based Asian Development Bank announced that it will finance a prefeasibility study for the pipeline running from Turkmenistan to Pakistan. There are several other competing proposed pipelines to export the substantial gas and oil reserves from Central Asia, including Turkmenistan, to western markets.
Through mid-2002, foreign involvement in Turkmenistan's energy industry has been vital to the economic development of the former Soviet state. However, concerns about regional security (given its geographical position bordering Afghanistan and Iran), an incomplete legislative environment, and insufficient export options have limited investments.
Nonetheless, several gas and oil exploration and production joint ventures have been established with companies worldwide, including Ireland's Dragon Oil PLC, Argentina's Bridas Sapic, the Netherlands' Larmag Energy NV, the UAE's Eastpak International, and Italy's Tecnologie Progetti Lavori SPA. Other international energy companies that have recently pursued projects or interests in Turkmenistan include the UK's Burren Energy PLC and Monument Resources Petroleum Co., Austria's Pado Oil & Chemical SA, and Malaysia's Petronas Carigali Overseas Sdn. Bhd. ExxonMobil Corp. decided to pull out of Turkmenistan in June reportedly after disappointing well test results at its Garashsyzlyk-2 project.
The Turkmenistan government and Dragon Oil, 70% of which is owned by the UAE's Emirates National Oil Co., signed a 25-year PSA for the Cheleken contract area in the Turkmen Caspian Sea in November 1999. The PSA, which covers two Soviet-era field discoveries, has an option to extend another 10 years. According to some analysts, reserves in the Cheleken contact area could total as much as 600 million bbl of oil and 65 bcm of natural gas. Dragon Oil, which has been producing oil from the Cheleken contract area for 8 years, brought its first well on stream in August 2001. The company has plans to invest $80 million in Cheleken development and redevelopment this year, on top of the $60 million invested in 2001.
Turkmen officials have also concluded several oil and gas agreements with Iran, which lies to the south. The Turkmen government has very good ties with Iran, and the two countries have been developing close political contacts since Turkmenistan's independence. Iran has an extensive internal pipeline system with which Turkmenistan can conceivably integrate.
If a pipeline transported Caspian oil south, all that would be needed is a new line of about 100 km to link either Turkmenistan or Azerbaijan (or both) to Iran's pipeline network and on to major export terminals in the Persian Gulf.
Iran is anxious to boost its oil imports from Turkmenistan and elsewhere in Central Asia because most of the country's oil fields are located in the south, so it is more economical for Iran to supply imported crude to its northern regions, freeing up oil in the south for exports via the Persian Gulf.
Improving investment conditions
Clearly, the investment climate of Turkmenistan is risky and in need of improvement.
An important next step in informing the international investor community on energy-related programs and opportunities in Turkmenistan is the development of a compendium on all pertinent laws and regulations in English. Currently, there is no single source for all of the energy as well as environmental laws—plus related international agreements and protocols to which Turkmenistan subscribes—available either in Russian or English.
For example, Turkmenistan is a signatory to the 1994 Energy Charter Treaty of Europe, which represents an attempt by more than 50 countries to create an international investment and trade regime and facilitate financing and cooperation in the energy industry.
In addition to having complete texts of the laws and regulations, information on the implementation of specific industrial standards in the country is necessary for foreign investors.
Key projects
An extended list of priority investment projects supported or proposed by the Turkmenistan government is shown in the table below.
New opportunities for international participation in Turkmenistan's oil and gas industry were highlighted in a major conference in May 2002 in Ashgabat, which covered the country's investment climate, business cooperation priorities, technology and equipment needs, legal and taxation issues, and the transfer of technology to Turkmenistan.
The primary industries in Turkmenistan are oil refining, oil and gas production, chemicals production, building materials, and electricity generation.
Oil output is concentrated in the west (Balkan Velayat), refining in the west and east (Turkmenbashi and Seidi), and gas production in the southern, northeastern, central, and West Karakums regions.
Most of the polluting air emissions in the country result from oil and gas industry operations, with only 3% of pollutants attributable to other industries.7
Efforts to reduce pollutants from the national oil and gas industry and improve overall efficiencies of operations could include those priority investment projects listed in the table, as well as creating facilities for the production and transportation of LPG.8 9
Turkmenistan's largest refinery at Turkmenbashi was renovated in 1999 and 2000, resulting in the installation of new hydrorefining and catalytic reforming units in February 2000. The government reported that the higher-octane gasoline produced with the new equipment is of considerably better quality than the 93 octane gasoline previously produced at the refinery. In February 2000 the government also approved the renovation of the vacuum unit at the refinery to be completed by Ireland's Emerol Ltd. and Pado Oil. The new unit is designed to provide feedstock for a new catalytic cracker as well as for other, existing facilities at the refinery.
Other improvements to oil and gas industry equipment will include reconstruction of a gas export pipeline in western Turkmenistan built in 1974 to carry Turkmen gas to Russia and Ukraine by way of Kazakhstan, and the renovation of the Belek gas compression plant, also in the west. Both projects will be undertaken by the Ukrainian company Ukrgazprombud in exchange for natural gas supplies.
The gas export pipeline was previously called Central Asia-Center. It transported Turkmen natural gas by way of Kazakhstan to interconnects with Russia's and Ukraine's pipeline systems. Unlike another branch of the Central Asia-Center system that sends gas from Turkmenistan's east and accounts for 90% of the country's export gas, the western branch is in a deteriorated condition.
Ukrgazprombud is expected to sign an agreement worth $16 million with Turkmenneftgaz to reconstruct the western pipeline. In exchange for this work, Turkmenistan will supply 383 million cu m of gas in 2002-03 at $42/1,000 cu m.10 Ukraine has a contract for about 40 bcm of Turkmen gas.11
Production outlook
Oil and gas production and refining will continue to be the most critical sector of the Turkmenistan economy throughout the decade, accounting for substantial foreign exchange earnings.
The government's Long Term Economic Development Plan to 2010 is based on the exploitation of considerable proven and probable oil and gas reserves, and a number of measures have been outlined to support and expand the industry by increasing output, improving effectiveness of deep drilling, and developing new fields.
Accordingly, foreign investment and new exploration and refining technologies will be sought. Priority will be given to the production of hydrocarbons on the Caspian Sea shelf and in the Amu Dar'ya gas and oil basin.
By 2005, production of oil and condensate in Turkmenistan is expected to reach 28 million tonnes, of which 15 million tonnes will be exported (Fig. 1). By 2010, oil output will rise to 48 million tonnes, with exports amounting to 33 million tonnes.
As for gas, output is expected to reach 85 bcm by 2005 and 120 bcm in 2010, while gas exports rise to 70 bcm and 100 bcm, respectively. Niyazov has made clear his intentions to significantly boost gas and oil exports over the next several years to help expand the country's overall economy.
In an effort to increase hydrocarbons output, the Turkmen government will periodically offer acreage for bidding through an international tender process. Several international firms have already won rights to explore for and develop gas and oil resources in the country, including the ExxonMobil-Monument-Turkmenneft consortium, which has a contract to explore and develop hydrocarbons in the Garashsyzlyk block off Turkmenistan.
On the Caspian shelf, Petronas Carigali will continue its production activities begun in 1996. To date the Malaysian oil company has invested more than $60 million to explore and develop Gubkina, Barinova, and Vostochny Livanova oil fields on Block I in the Caspian.
According to government projections, by 2005 the volume of crude oil produced by foreign companies in Turkmenistan will exceed 50% of the country's total oil output.
Refining outlook
The expected dramatic growth of Turkmenistan's gas and oil production to 2010 will require continued expansion and improvement of the country's two refineries, enabling them to treat larger volumes of crude and condensate.
In this context, major reconstruction efforts already are under way to broaden the slate of products at the refineries, improve their quality, and facilitate increased exports.
Current plans are to construct a lubricants production unit at the Turkmenbashi refinery, with the participation of Germany's Mannesman AG. This development effort will be aimed at satisfying domestic market demand. Also at Turkmenbashi, the Japanese company JGC Corp. has started to construct a unit for the production of polypropylene.
A catalytic cracking unit now under construction at Turkmenbashi with foreign investment will provide high quality gasoline to Turkmenistan and to world markets.
Fields in western Turkmenistan as well as Kokdumalak field are expected to provide crude oil and condensate to the Seidi refinery within the forecast period. Also at Seidi, construction is planned for an ethane-based olefins plant with a capacity of 200,000 tonnes/year of polyethylene. Plans call for design and construction of additional pipeline facilities to transport Kokdumalak condensate to the Seidi refinery.
The Turkmen government also has outlined plans to develop infrastructure for the production and transportation of LPG for use in the country's motor transport sector.
After renovations at the Turkmenbashi and Seidi refineries, the two facilities will be capable of processing 9 million tonnes/year and 6 million tonnes/year of oil, respectively, by 2010.
Pipeline outlook
The natural gas pipeline network of Central Asia reflects the importance of the transportation of natural gas in the region.
Over 10,000 km of gas trunk pipe- line was laid during Soviet times in order to transport gas from Uzbekistan, Turkmenistan, and Kazakhstan to Russia and Europe. Furthermore, the capital cities of all five of the Central Asian republics are connected by gas pipelines. Currently, the Central Asian gas industry refers primarily to Turkmenistan, a net gas exporter, which holds a dominant position among the southern FSU gas producers. Turkmenistan is reportedly capable of producing more than 80 bcm/year of gas, most of which could be exported.
Turkmenistan's exports of gas to its Central Asia neighbors—as well as to Armenia, Azerbaijan, and Georgia—are erratic, generally small, and with limited future growth prospects.
Through 2005 and well beyond, efforts will continue in Turkmenistan to improve gas pipeline infrastructure to allow for increased exports. In the western part of the country, construction of gas pipelines will link new fields with the existing Turkmenistan-Iran gas pipeline and the creation of the Shatlik-Turkmenbashi common carrier gas transportation system.
As a critical part of its policy to boost gas exports, Turkmenistan is actively seeking alternative export options to Russia's pipeline network. For several years, the most important proposed project was dubbed the Trans-Caspian Gas Pipeline, which would extend from Turkmenistan under the Caspian Sea to Azerbaijan and through Georgia to Turkey. But Niyazov has withdrawn his support for this proposal and instead has shifted support to the Trans-Afghanistan-Pakistan proposed gas pipeline, with an estimated supply of 15 bcm/year within a first stage.
Alternative gas pipelines also being considered in Turkmenistan include a Turkmenistan-Iran-Turkey-Europe (Bulgaria) gas pipeline, with an estimated natural gas supply of about 23 bcm in 2005 and 30 bcm in 2010; and a Turkmenistan-China gas pipeline.
The latter project was initiated in 1993 by Turkmen officials in an attempt to begin the process of reducing and eliminating their country's dependence on Russia's transport system. China is interested in the project, as it will play a significant role in expediting the transportation of its Xinjiang region's natural gas to eastern and southern China. Japan, in turn, is promoting the pipeline as a means to supplement gas supplies to that energy-deficient country, assuming the pipeline is eventually linked to the eastern part of China and ultimately Japan. While cost estimates for the pipeline are astounding—$11.8-22.6 billion, depending on route and final destination—Japan's Mitsubishi Corp. and China's state-owned China National Petroleum Corp. and other interests are moving ahead with preliminary planning and design of what would be one of the largest infrastructure projects in the world.
Rules and regulations
New environmental regulations pertaining to the gas and oil industry of Turkmenistan have been developed with assistance from the European Union's TACIS (Technical Assistance to the Commonwealth of Independent States) program and the US Agency for International Development.
The Rules and Regulations for the Development of Hydrocarbon Fields of Turkmenistan, made effective Oct. 22, 1999, and sometimes referred to as the "Golden Age" regulations of Turkmenistan, are considered reasonable and in accordance with international standards.
During the drafting of these regulations in 1999, oil and gas industry officials were offered the opportunity to provide input and advice, much to their satisfaction. Foreign companies continue their dialogue on environmental issues with CBUHR in part to remain aware of new environmental concerns.
The Golden Age rules break down as the following categories:
- General rules.
- Permitting and bonding.
- Exploration plans.
- Appraisal plans.
- Drilling, completion, and abandonment plans.
- Development plans.
- Operation of producing wells and production facilities.
- Conservation of oil and gas resources.
- Environmental protection.
- Safety and health.
- Specific offshore rules.
- Records and recording.
- Remedies.
The rules also contain information on environmental impact assessments in Turkmenistan, including guidelines on public involvement, monitoring, spill reporting, waste storage, and transportation.
The CBUHR holds responsibility for ensuring that the oil and gas industry complies with the Golden Age rules and regulations.
In addition to the 1997 Turkmenistan law on hydrocarbons and the Golden Age regulations, the country's oil and gas industry complies with industrial environmental standards established by the Committee on Standardization under the cabinet of ministers. These standards cover all sectors of industry.
Other pertinent regulations governing the hydrocarbons industry include the About Subsurface Law of Turkmenistan (approved Dec. 14, 1992), National Plan of Turkmenistan on the Prevention and Disposal of Oil Spills (approved by Presidential Decree No. 5361, Aug. 21, 2001), and the Model Production Sharing Agreement for Petroleum Exploration and Production in Turkmenistan (approved on Mar. 20, 1997).
The object of the agreement on model production sharing is to carry out exploration, development, and production of petroleum in any prespecified contract area. A contractor is required to carry out petroleum operations at its own risks and costs and provide all necessary capital, technology, and know-how.
Legislation of Turkmenistan on basic rights and obligations of the subsurface users is presented in the About Subsurface Law Of Turkmenistan.
The National Plan of Turkmenistan on the Prevention and Disposal of Oil Spills aims to minimize the impact of oil spills on the environment and health. The plan's tasks include the creation of an adequate oil spill response mechanism, the identification and placement of oil spill response equipment in Turkmenistan, and the delineation of the focus area of the plan.
Conclusions
An extremely large amount of untapped gas exists in Turkmenistan's vast fields, yet development prospects will remain somewhat dim until viable transport routes are established to bring the crude to lucrative markets in both Europe and the Middle East and perhaps ultimately China.
While Western oil and gas companies were excited about the tremendous investment opportunities in Turkmenistan several years ago, a combination of economic, political, cultural, and historical factors are currently hindering most prospects for significant joint venture development.
Turkey, Iran, and China are seeking allies in Central Asia, on the one hand, while Russia is exerting increasing political influence on any discussions concerning new pipeline development from Turkmenistan as well as from Kazakhstan and Azerbaijan.
Most importantly, those who control the gas and oil routes out of Turkmenistan will impact all future flows (directions and quantities) and the distribution of revenues from new production.
References
- BP PLC, June 2002, Statistical Review of World Energy, London.
- Ambo News, Jan. 15, 2002, "Turkmenistan/Ukraine: Confirms Plans to Deliver 34 M Cu M of Gas," Kiev.
- US Energy Information Administration, September 1999, "Turkmenistan: Country Analysis Brief," Washington, DC.
- BISNIS Bulletin, October 1999, "An Eye on the Oil & Gas Sector of Turkmenistan," Irina Begjanova, Department of Commerce, Washington, DC.
- Oil reserves in the Caspian Sea have been estimated at up to 8 billion bbl, with a majority of that—5.4 billion bbl—occurring in Kazakhstan territory. Some analysts predict that by 2010, Caspian development will yield up to 4 million b/d, or about 60% of today's North Sea output.
- Oil Daily, Dec. 31, 2001, "Exploration of Caspian to Branch Out in 2002."
- Ministry of Nature Protection, 2002, Draft National Environmental Action Plan, Ashgabat.
- BISNIS Bulletin, ibid.
- Dorian, James P., May 2001, Oil and Gas in Central Asia and Northwest China, CWC Group, London.
- Ambo News, Jan. 13, 2002, "Turkmenistan to Reconstruct Export Gas Pipeline," Anna Kurbanova.
- Ibid.
The author
James P. Dorian is an energy and resources economist based in Honolulu (jdorian@ hawaii.rr.com). He currently supervises international energy programs for the government of Hawaii. Prior to this, Dorian was a research fellow at the East-West Center, also in Honolulu. He has lived and worked in former Soviet Central Asia and has 20 years of experience analyzing the energy markets and economic development strategies of the former Soviet Union and China, as well as the geopolitical forces affecting the global energy industry. Dorian recently visited Turkmenistan to assist the government there in developing a national environmental action plan. He has published 90 book and journal publications on oil and gas in the FSU and China, energy and economic development, and foreign investment risks and opportunities. Dorian has a PhD in resource economics from the University of Hawaii, where he presently serves as an affiliate graduate faculty member. He has an MS in energy and mineral economics from West Virginia University and a BS in geology from Pennsylvania State University.
Turkmenistan's priority investment projects
•Construction of a 1,300 km Turkmenistan-Afghanistan-Pakistan gas pipeline to carry up to 20 billion cu m/year (bcmy) of natural gas. The gas line would likely be constructed to Pakistan's Sui field, from which existing infrastructure could be tapped to supply major local markets. Estimated cost is $2 billion.
•Construction of an 1,800 km trans-Caspian gas pipeline to transport natural gas from eastern Turkmenistan via the Caspian Sea, Azerbaijan, and Georgia to Turkey (Erzurum). The projected capacity of the pipeline is 16-30 bcmy. Estimated cost is $2-3 billion.
•Construction of an 8,000 km Turkmenistan-China-Japan gas pipeline with a capacity of 30 bcmy. A line would be laid connecting China's western Xinjiang province and the Tarim basin moving through central China to the eastern port of Lianyungang. It would be laid under the seabed in the Yellow Sea, across South Korea, and under the Sea of Japan, terminating in Japan. Estimated cost is $10-20 billion.
•Construction of a gas pipeline from Turkmenistan to Iran-Turkey-Europe (Bulgaria) with an estimated natural gas supply of 23 bcm in 2005 and 30 bcm in 2010.
•Upgrading the Seidi oil refinery (commissioned in 1991) to a total capacity of 120,000 b/d of oil, including addition of hydrorefining capacity. Project estimated cost is $300 million.
•Construction of a lubricants production unit at the Turkmenbashi refinery with foreign participation.
•Construction of a gas processing and petrochemical production complex at Seidi with an output capacity of 200,000 tonnes/year of polyethylene. Project estimated cost is $800 million.
•Installation of new gas gathering facilities feeding the new 94 km Beshkyzyl-Yelkui-Uchadji pipeline. Estimated cost is $50 million, including the pipeline.
•Rehabilitation of the 42 km Vyshka-Belek trunk oil pipeline. Estimated cost is $3 million.
•Construction of the 135 km Okarem-Vyshka trunk oil pipeline. Estimated cost is $11.5 million.
•Development of Eastern Cheleken, Northern Erdekli, and Southern Kamyshldja oil fields. Estimated cost is $30 million for each field development.
•Rehabilitation of Shatut, Ekerem, and Nebitlidje oil fields. Total estimated cost is $50-60 million.
Note: This list comprises selected priority investment projects in the oil and gas sector approved or supported by the Turkmenistan government since 1991. Implementation of any project will depend on project feasibility, the availability of budgetary resources or private investment, and current Turkmen government ambitions. Some projects are presently under way; some are temporarily shelved.
Sources: Dorian, James P., 2001, Oil and Gas in Central Asia and Northwest China, CWC Group, London; Turkmenistan Government, 1999, The National Program of Turkmenistan President Saparmurat Turkmenbashy: "Strategy of Socioeconomic Developments in Turkmenistan for the Period Up to 2010," Ashgabat; BISNIS Bulletin, 1999, "An Eye on the Oil and Gas Sector in Turkmenistan," Irina Begjanova, US Department of Commerce, Washington, DC.