Turkmenistan launches work on $2 billion gas pipeline in bid to boost exports

Turkmenistan starts new $2 billion gas pipeline

SHATLYK, Turkmenistan — Turkmenistan on Monday started work on a $2 billion gas pipeline that aims to boost its export capacity and increase the reclusive nation’s economic and political clout in the global gas market.

President Gurbanguli Berdymukhamedov hailed the new 620-mile (1,000-kilometer) pipeline — dubbed East-West — stressing that Turkmen firms would build it on their own.

“Construction of the East-West pipeline, using our own resources, is advantageous not only economically, but politically as well,” he said at a welding ceremony in the southeastern part of the country.

Turkmenistan’s gas wealth has long been the focus of intense rivalry between Russia, China and the West. Russia had a lock on most of the country’s gas exports until last December, when a major China-bound pipeline went into operation.

By building the new pipeline on its own, Turkmenistan will essentially get the final say about the ultimate destination of the natural gas: Russia, or the West.

Russia has been trying to convince Turkmenistan to cooperate on a proposed pipeline that would stretch along the Caspian Sea and into Russia, where it would converge into Gazprom’s vast pipe system.

But the U.S. and Europe are attempting to convince the Turkmens to ship the gas beneath the Caspian Sea and into the planned Nabucco system — an ambitious pipeline that aims to circumvent Russia’s near stranglehold on European gas markets. In recent years Russia has tarnished its reputation as a reliable supplier after spontaneous cutoffs to Ukraine, through which most of its exports to the West flow.

However, the Western-backed Nabucco could run into complications because of unresolved border disputes among Caspian Sea littoral states.

Berdymukhamedov, however, suggested that the East-West pipeline would eventually carry enough natural gas to meet not only Turkmenistan’s domestic needs, but also all planned export routes as well.

The pipeline will begin at the vast Southern Yolotan-Osman gas field near Afghanistan’s western border and boast an annual capacity of 30 billion cubic meters after its expected completion in 2015.

Independent auditors have said that the Southern Yolotan-Osman field may hold up to 16 trillion cubic meters of gas, making it one of the largest in the world.

Energy ties between Russia and Turkmenistan were damaged in April 2009, when a pipeline explosion blamed on Moscow by Turkmen authorities interrupted supplies. Russia’s Gazprom announced in April it would purchase only 10 billion cubic meters of gas this year, which is 80 percent less than it purchased earlier.