Turkmenistan gas: Galkynysh gas output will boost growth in 2014
In early September Gurbanguly Berdymukhamedov and his Chinese counterpart, Xi Jinping, launched the giant Galkynysh gas field. The project had been subjected to several delays, owing to the technological challenges of developing the field. The commencement of production at the field, which has the second-largest gas reserves in the world after Iran’s South Pars, will boost exports and provide support to economic growth over the longer term.
The reserves at Galkynysh are estimated by independent auditors, Gaffney, Cline & Associates, to stand at between 13.1trn and 21.2trn cu m of gas. Once the field is running at full capacity, it will produce around 25bn cu m of natural gas a year. Output from Galkynysh will largely be exported to China through the Central Asia-China pipeline, to which two new lines are being added. The third section of the pipeline is currently under construction, and will run parallel to the existing lines A and B from Turkmenistan, via Uzbekistan and Kazakhstan, onto China. The pipeline expansion is expected to be completed by end-2014. During Mr Xi’s visit, Turkmenistan and China announced that a fourth artery of the pipeline would be constructed, which will run from Turkmenistan, through Uzbekistan, Tajikistan and the Kyrgyz Republic before linking up with China. China is financing the construction of the pipeline, known as “Line D”, which will be completed in 2016.
Longer-term economic growth secured
The impact of the commencement of production at Galkynysh will become evident in 2014, when the field is expected to reach peak output. Once Line D is inaugurated in 2016, Turkmenistan will be able to increase substantially its exports to China. Turkmenistan exported 20bn cu m of gas to China in 2012 – this is set to rise to 65bn cu m by 2020, equivalent to half of China’s total gas consumption in 2011. Currently over half of China’s natural-gas imports are supplied by Turkmenistan, and this proportion will increase as further Turkmen-Chinese export routes become available.