TURKMEN-RUSSIAN OIL AND GAS CONFERENCE WRAPPED UP IN ASHGABAT
The first in the history of two countries Turkmen-Russian conference entitled "Prospects for cooperation between Turkmenistan and Russia in the oil and gas field", held in the Ashgabat's business-center "Serdar", confirmed that partnership between these biggest CIS energy powers has vast potential.
As was expected, the conference focused on issues related to implementation of a 25-year interstate agreement between Turkmenistan and Russia on cooperation in the gas field. As is known, presidents Saparmurat Niyazov and Vladimir Putin signed this document in Moscow in April 2003, implementation of which started this year. Apart from importing natural gas, Russian Gasprom acts as an operator on Turkmen gas shipments to CIS markets, in particular to Ukraine. Newly established RosUrkEnergo company will take up this function starting next January.
Russian Gasprom will purchase 1,8 trillion cub.meters of gas from Turkmenistan over the contract period. The Turkmen side, in turn, is carrying out a wide range of work on improving quality of raw material, increasing output and safety of gas transportation with the aim of ensuring uninterrupted supply of the agreed volumes of gas. Under these obligations, for the last years alone there have been reconstructed large technical systems of gas infrastructure and built modern installations to bring quality of fuel to the world standards. A total of US$800 mln have been invested in the infrastructure of state concern Turkmengas in the last four years, said minister of oil and gas industry and mineral resources of Turkmenistan Amangeldy Pudakov at the conference. On its part, Turkmenistan guarantees implementation of the long-term contract with Russia, according to the minister. In fact, the republic plans to produce 120 bln cub.meters of gas in 2010 and to double this figure by 2020.
It is necessary, however, to look into the issue of expansion of transportation capacities of existing interstate pipelines and also building new pipelines to get these volumes of Turkmen gas to customers. In particular, Gazprom Deputy CEO Alexander Ryazanov raised this issue at the conference. He proposed to work out a coordinated gas transportation policy for the successful implementation of the 25-year Turkmen-Russian agreement.
"Turkmenistan and Russia are the largest gas producers and have to act jointly, Alexander Ryazanov said. We need to have a clear picture of available gas reserves and solve the problem of increasing the capacity of the Central Asia - Center (CAC - Turkmenistan-Uzbekistan-Kazakhstan-Russia) gas pipeline already now."
"Turkmenistan supports Gasprom's initiative to sign a monitoring agreement together with gas transportation organizations from Russia, Kazakhstan and Uzbekistan on the schedule of work of the CAC gas pipeline, chairman of state concern Turkmengas Guchnazar Tachnazarov noted in his address to the conference. According to him, this agreement will "make it possible to divide the existing and future gas pipeline capacities among all CAC transit states on the fair and proportional basis."
It is necessary to recall that under the above-mentioned 25-year agreement between Russia and Turkmenistan on the natural gas supplies, Gasprom is to purchase 4.25 bcm this year, 6 bcm in 2005 and to increase annual gas purchases to 70-80 bcm of gas by 2009. For this, the existing capacity of the CAC gas transportation system will be increased from 44-45 bcm a year to 50 bcm and 80 bcm a year at the second phase. Besides, Gasprom is considering construction of an additional pipeline through Uzbekistan that, if approved, can be built in 2,5 years. "We do not intend to limit ourselves to the minimum amount of gas supplies," Ryazanov underlined meaningfully.
The conference discussed at length the prospects for Gasprom's participation in Turkmen oil projects. The company is ready to look into a possibility of taking part in extraction of oil and gas from both offshore and onshore fields in Turkmenistan, Ryazanov said. He also confirmed information that by taking over Rosneft Gasprom would become the co-founder of ZARIT consortium, founded by Rosneft, Zarubejneft and ITERA to develop fields in the Turkmen shelf of the Caspian Sea.
According to Ryazanov, Gasprom also sees a number of other attractive factors to start business in Turkmenistan and boost joint activity in this direction.
"We can develop onshore fields too... If they give us a hint, we will come...," Ryazanov said.
But judging by statements of Turkmen participants at the conference, as of today, Ashgabat prefers to develop onshore fields on its own and offers potential partners and investors fields in the Turkmen zone of the Caspian Sea.
At present, Turkmenistan's annual oil output stands at 9 mln tonnes. In the mean time, the government plans to increase the production of oil to 48 mln tonnes by 2010 and to 100 mln tonnes by 2020. It is expected that investments in the oil and gas sector of the country will amount to US$25 bln by 2010 and to US$60 bln by 2020, where foreign investments will account for over 40% of that figure. Ashgabat believes that Gasprom's share in the invested funds will be considerable.