Turkmenistan state-owned Turkmengaz has signed a five-year supply agreement with Russia’s Gazprom for the annual delivery of 5.5 billion cubic metres of gas, writes Vladimir Afanasiev.

The agreement follows on from a short-term contract between the two companies that ran from April to June.

According to Gazprom, Turkmengaz sold about 1.2 Bcm of gas in total under this contract, which was signed in January after a decade of disagreements between the two countries on gas supply and payment terms.

During this period, China replaced Russia as the largest offtaker of gas from Turkmenistan, after Turkmen authorities permitted the involvement of China National Petroleum Corporation in the development of the Galkynysh group of fields. For this purpose, Turkmenistan, Uzbekistan and Kazakhstan had also built an export pipeline for gas from these countries to be delivered to China.

Turkmenistan is hoping for Uzbekistan, Tajikistan and Kyrgyzstan to proceed with a plan to build an extension of this pipeline to China to add an estimated 25 Bcm of annual gas export capacity.

Turkmenistan has the second largest gas reserves in the former Soviet Union area after Russia, and is understood to have exported more than 35 Bcm of gas to China last year.

Until 2009, Turkmenistan exported more than 50 Bcm of gas per year to Russia and Ukraine via the Central Asia–Centre pipeline network, built by the Soviet Union to link Central Asia gas producers with Europe.

Weekly

Turkmengaz signs longer term deal to supply gas to Gazprom