Diversification without illusions: What can Europe expect from Turkmenistan on energy
Diversification without illusions: What can Europe expect from Turkmenistan on energy
The Russian-Ukrainian war has disrupted the classic East-West energy supply routes, and this situation has increased the value of the Central Asian region. The new objective is to ensure that significantly larger volumes of gas reach Central Europe than at present. However, Turkmenistan's geographical location and infrastructure make it a special case. The most viable option for Turkmenistan's sustainable, potential natural gas exports to Europe could be the Trans-Caspian Gas Pipeline under the Caspian Sea, which is planned to be 300 km long and have a capacity of 30 billion cubic meters per year. However, the complicated legal status of the Caspian Sea and strong Russian and Iranian opposition have so far prevented the project from moving forward. In the fourth part of our series, we look at what kind of energy cooperation the European Union can expect from Turkmenistan.
The significance of Turkmenistan
Turkmenistan has been located on a significant section of the Silk Road, an important transport route since ancient times. Today, China’s BRI, regional infrastructure development projects, and the expansion of trade routes and intercontinental gas pipelines can help Turkmenistan become a key player in the long-term economic relations between East and West. In addition to Turkmenistan's rich cultural and historical heritage, the country's international importance is also strengthened by the fact that it has the world's fourth largest proven reserves of natural gas, accounting for about 10 percent of the global supply.
By the beginning of the 21st century, due to the dynamic growth in demand for fossil fuels, these had become an object and a tool of global political, economic, and overall, military competition. As a result, the strategic importance of countries with large reserves of natural gas and oil has increased, and they have become the scene of rivalry between powers seeking to gain control over the resources. This is especially true in the case of the fossil fuel-rich Central Asian countries of Turkmenistan, Uzbekistan and Kazakhstan. One could even say that a kind of 21st century “great game” is unfolding, in which, in addition to regional powers, Russia, China, the United States of America and the European Union compete for the region’s resources.
Turkmenistan as a natural gas exporter
Turkmenistan is the largest exporter of natural gas in Central Asia, the country with the fourth largest proven natural gas reserves in the world after Russia, Iran and Qatar, and its largest onshore gas field is the Galkynysh field. Exporting Turkmenistan’s gas to Europe is technically feasible in several ways, but key factors for each option are the sustainability, cost and availability of transportation infrastructure.
One solution is to transport natural gas in liquefied form (LNG) across the Caspian Sea. However, the production of LNG requires special technology and significant investments and needs to be stored and transported in insulated tanks. However, its advantage is that its energy density is much higher than that of compressed natural gas (CNG), which could make its use more economical in the case of large-volume and long-distance transport. However, LNG transport across the Caspian Sea would require the construction of significant port and storage infrastructure in both Turkmenistan and Azerbaijan, which would entail significant investment needs primarily on the Turkmen side. An alternative solution could be the maritime transport of CNG, which requires a technologically simpler and cheaper infrastructure to build, as the natural gas does not require extreme cooling. However, CNG requires a larger volume due to its lower energy density, making it less economical for longer distances and larger quantities.
The most frequently mentioned solution for bringing Turkmen gas to Europe is a pipeline under the Caspian Sea, which could connect to the Southern Gas Corridor infrastructure via Azerbaijan, from where natural gas could be transported to the European Union via Turkey using the existing infrastructure. The Trans-Caspian Gas Pipeline, which is planned to be around 300 kilometers long and have a capacity of 30 billion cubic meters per year, has been on the agenda for a long time, but its implementation has so far encountered political, legal and financing obstacles. Although the 2018 Convention on the Status of the Caspian Sea partially settled the conditions for the construction of submarine pipelines, the project has not yet progressed beyond the planning stage, mainly due to regional geopolitical conflicts of interest and the economic uncertainties of the investment.
Another characteristic of Turkmenistan's exports is that the country traditionally sells its natural gas on the basis of the so-called "gas at the border" principle, meaning that it undertakes to transport the extracted gas only to the country's border, and the costs of transit and infrastructure construction are borne by potential importers. For this reason, access to European markets for Turkmenistan's gas would require not only the construction of new transport routes, but also coordinated regional infrastructure development, suitable transport and reception capacities, and stable market demand.
Strategic leverage
However, in the current global energy situation, another project, also discussed for years and fragile, the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, is becoming increasingly valuable for Turkmenistan. This shows a geopolitical rebalancing from Europe to Southern markets. This would offer Turkmenistan significant opportunities, while allowing to maintain stable relations with both Russia and China. As a result, Ashgabat increasingly prioritize projects that promise tangible financial returns and align with national interests, rather than just pursuing uncertain initiatives promoted by European partners.
Author: Blanka Benkő-Kovács, advisor - LCTS, LUPS
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