BMI View : As a result of its growing gas reserves, Turkmenistan is making efforts to also increase production and exports, notably to China. Our forecast for gas production to reach 103.5bcm per annum by 2019 implies an average growth rate of 8.2% a year, meanwhile gas exports will increase from 49bcm in 2015 to 70.8bcm in 2019. The country's rising export potential is supported by significant strengthening of ties with China, with whom it shares the China-Central Asia Pipeline .
|e/f = BMI estimate/forecast. Source: BMI/EIA|
|Crude, NGPL & other liquids prod, 000b/d||258.7||276.0||289.1||302.9||314.7||326.9||336.7|
|Dry natural gas production, bcm||70.9||75.3||81.6||89.2||96.7||105.4||113.8|
|Dry natural gas consumption, bcm||26.5||28.1||30.4||32.5||34.8||37.2||39.5|
|Refined products production, 000b/d||171.9||172.7||173.6||174.4||176.2||178.0||179.7|
|Refined products consumption & ethanol, 000b/d||144.0||154.1||164.9||174.8||185.2||196.4||208.1|
We expect oil reserves will significantly deplete over our forecast period as production remains high but little progress is made towards resolving the Caspian maritime border dispute. Gas reserves will remain largely stagnant despite production increases, given the newly discovered mega-fields in the southeast of the country and potential for significant new discoveries in the area.
A renewed emphasis on international investment, along with developments by Turkmenebit, has lead to a slow but progressive increase in oil production. This will endure over the coming years. Larger production growth within our forecast period, however, will be impossible until a sustainable agreement is reached between Iran, Turkmenistan and Azerbaijan on Caspian maritime border disputes. This would enable the development of larger offshore fields.
With stable refining capacity and rising crude production, the country will experience rising net crude oil exports. This will be counterbalanced by rising refined fuels imports from 2016 onwards when we expect Turkmenistan will become a refined fuels net importer. While the country will remain a net oil exporter over the period, these remain modest compared to the country's sizeable gas exports.
Turkmenistan's gas production potential remains inherently linked to the Galkynyksh field and gas uptakes from China. With a slowdown in the Chinese economy and the high costs of future phases of the field, we note risks to our gas production forecast lie on the downside.
We expect gas consumption will rise throughout the forecast period pulled up by gas-based power generation projects. We note increasing downside risks to our forecast as the country's economy could be hit by falling oil and gas prices and a slowdown in the Chinese economy.
Turkmenistan's export base is currently not highly diversified, and blossoming agreements with China will make the country increasingly dependent on mainland demand over the coming years. A proposed goods-for-cash deal with Iran would help Turkmenistan to diversify its export sources, however.
The Turkmenistan Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Turkmenistan including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
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