More than 300 delegates from 31 countries gathered in Paris for the International Investment Forum on Attracting Investments in the Energy Sector of Turkmenistan (TEIF 2024).
Among the participants are representatives of international organizations, including the UNECE, OPEC, the Global Gas Center (GGC), the International Energy Agency (IEA), delegates from major oil and gas companies, including Turkmenistan’s longtime partners – Petronas, CNPC, ADNOC, Dragon Oil, Bouygues Bâtiment International, GaffneyCline. The key speakers of the first day of the forum were the heads of national companies in the hydrocarbon sector – the state concerns Turkmengaz and Turkmennebit.
Dozens of speeches, ideas and opinions, assessments and perspectives made during four sessions (plenary and three panel discussions) were united by one common message. The growing urbanization in the world, the growth of economic activity requires more energy. By 2030 alone, another billion people will move to live in an urban environment, and this will require almost 50 new cities the size of Paris.
Global urbanization and economic growth are driving a significant increase in energy demand, projected to grow by 23% by 2045 according to OPEC. The world needs more clean and affordable energy. At the same time, no energy source alone can withstand such a load to ensure an adequate level of energy security.
Natural gas is seen as a crucial element in the energy transition, but needs to be coupled with investments in low-carbon technologies and emission reduction strategies, energy efficiency improvements, renewable energy, and the circular economy.
Despite the push for renewables, oil and gas demand is still expected to grow, with gas seeing a bigger increase (28%) compared to oil (17%) by 2045. Their combined share in the energy mix is predicted to remain around 55%, similar to today’s levels. The oil and gas sector will require substantial investments of $14 trillion by 2045 to meet these demands, OPEC says.
As a country with vast hydrocarbon resources (4th largest proven reserves), Turkmenistan is positioned to contribute to global energy needs and is actively seeking foreign investment in its energy sector.
Mining, deep processing, the petrochemical industry, renewable energy sources, transport infrastructure, and environmental aspects of the development of hydrocarbon fields are areas where Turkmenistan is ready for an equal dialogue and partnership with foreign investors.
The country offers a stable economic and political climate – a significant advantage in today’s challenging world. Additionally, Turkmenistan boasts a well-established legal framework to ensure a smooth investment process.
A key aspect of Turkmenistan’s energy strategy involves developing its domestic gas-chemical and oil refining industries. This will not only create economic opportunities but also contribute to regional energy security. Environmental responsibility remains a top priority. Turkmenistan recently joined the Global Methane Pledge at COP-28, demonstrating its commitment to addressing climate challenges through international cooperation.
The country is systematically taking practical actions in this direction. Thus, within the framework of the USAID Power Central Asia project to determine the amount of methane emissions throughout Turkmenistan. A report on methane emissions is expected to be ready by the end of May.
In addition, Turkmenistan cooperates with the Office of the UN Resident Coordinator, UNEP, UNECE, and UNDP on the assessment of methane emissions, as well as the preparation of proposals for the implementation of projects aimed at reducing emissions in the oil and gas sector.
Turkmenistan has established a forward-thinking initiative by hosting a Regional Center for Climate Technologies. This non-profit center will analyze and develop models for transferring technologies related to climate change mitigation. The center will focus on overcoming legal, technical, and financial barriers to technology transfer, addressing the specific needs of Central Asian countries. These needs encompass climate-resilient agricultural practices to ensure food security and technologies to reduce methane emissions. Funded by the Government of Turkmenistan for its initial five years, the Center will position Turkmenistan as a leader in regional climate change efforts.
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Among the promising investment projects presented at TEIF2024 are projects for the development of the largest gas field Galkynysh.
Here are some facts announced by the state concern Turkmengaz regarding Galkynysh:
• Galkynysh is the second largest gas field in the world with estimated reserves of 27.4 trillion cubic meters.
• The completed Phase 1 of field development ensures the supply of 30 billion cubic meters of gas to China annually.
• The Phase 2 of development will increase supplies by 25 billion cubic meters to China.
• The Phase 3 will become the resource base for the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project with a capacity of 33 billion cubic meters per year.
• The strategy envisages seven phases of field development in total. Step-by-step development allows to regulate investment flows.
• During the period of continuous gas extraction, gross gas production throughout the field will reach more than 200 billion cubic meters per year
• The current stock of production wells includes 52 wells.
• The design flow rate of wells is 1.5 million cubic meters of gas per day, the potential capabilities of the field allow for a long time to operate wells with a flow rate of 2 million cubic meters per day.
• Chuantsin Drilling engineering company (CNPC) drilled three original wells at Galkynysh. These wells achieved a design flow rate of about 3 million cubic meters of gas per day.
• Future directions for improving technologies at Galkynysh: gas dynamic studies of dense carbonates and reefs, technology for drilling high-yield wells up to 5,000 meters deep under conditions of abnormally high reservoir pressure and a large floor of gas content, design of equipment for collecting and preparing gas for transportation, utilization of sulfur and carbon dioxide (10% of the gas at Galkynysh is acid gas).
Turkmenistan is a reliable supplier of natural gas, contributing to global energy security. The Turkmenistan-China pipeline project exemplifies this. This pipeline transports about 30 billion cubic meters of gas annually, replacing 60 million tons of coal in China and significantly improving the country’s environmental situation.
Turkmenistan is actively involved in developing new projects to deliver its gas resources to South Asia. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, designed to supply 33 billion cubic meters of gas per year, is a prime example. This project holds the potential to bring economic benefits and cleaner energy sources to the participating countries.
Mukhammetmyrat Amanov, Chairman of the Board of Directors, TAPI Pipeline Company Ltd, said at the forum that the construction of the Turkmen section of the gas pipeline is fully completed. Negotiations are currently underway with the current leadership of Afghanistan on key project agreements (host country agreement, gas transportation agreement, security arrangements, land acquisition agreement).
All negotiations are conducted in accordance with international standards.
Pakistan is considering the inclusion of TAPI in the Foreign Investment Protection Act to reduce risks for potential international creditors.
Also, Turkmengaz continues negotiations with several international companies that have expressed interest in the TAPI project.
Amanov stressed that Turkmenistan is striving to implement the TAPI project as soon as practically possible. Turkmenistan is currently in close contact with government agencies in Afghanistan and Pakistan in order to implement a 150 km long segment of the gas pipeline stretching from the Turkmen-Afghan border to Herat.
This segment is important from the point of view of providing energy to industrial facilities and households in the Herat area, and income from the project. In addition, bringing the gas pipeline to Herat will boost investor and creditor confidence in the project’s overall success.
To highlight the environmental advantages of natural gas, Amanov pointed out that compared to coal, burning one million British thermal units (Btu) of gas results in roughly 91 kilograms less of carbon dioxide emissions. Similarly, gas produces about 72 kilograms less CO2 per million Btu compared to oil.
Another promising area for attracting investments in the energy sector of Turkmenistan is the development of offshore fields in the Turkmen sector of the Caspian Sea. In particular, priority is given to blocks 11, 12, 16, 21, 23 and 24. According to these blocks, there is sufficient geological exploration information (surface mapping, results of 2D and 3D surveys, seismic data, identification of promising sites), investment teaser has been prepared. In short, this comprehensive database suggests significant potential for hydrocarbon reserves.
Other promising areas in the oil industry of Turkmenistan, potentially attractive for foreign investments and partnerships include drilling horizontal wells, development of fields with challenging geological conditions, extraction of hard–to-reach oil from mature fields, oil refining and production of petrochemical products.