BMI View: As a result of its growing gas reserves , Turkmenistan is making efforts to also increase production. With relatively small domestic consumption , Turkmenistan is also likely to increase its gas exports. 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 potential is supporting a significant strengthening of ties with China, with whom it shares the China-Central Asia Pipeline, which is slated to provide approximately 40% of China's gas imports by 2020.
|e/f = BMI estimate/forecast. Source: BMI/EIA|
|Crude, NGPL & other liquids prod, 000b/d||255.2||267.4||280.2||293.6||305.0||316.9||326.4|
|Dry natural gas production, bcm||64.5||68.5||74.2||81.1||87.9||95.9||103.5|
|Dry natural gas consumption, bcm||22.0||23.4||25.2||27.0||28.9||30.9||32.8|
|Refined products production & ethanol, 000b/d||152.7||153.4||155.0||156.5||158.1||159.7||161.2|
|Refined products consumption & ethanol, 000b/d||132.4||141.6||151.5||160.6||170.3||180.5||191.3|
The main trends and developments in Turkmenistan's oil and gas sector are:
Turkmenistan's state information agency reported an 11.2% increase in gas production in 2014, which is higher than what BMI currently estimates; it is likely that we will upgrade our gas production profile once the production figures can be confirmed.
The costs of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project are likely to exceed USD7.6bn, according to India's Ministry of Petroleum and Natural Gas. The TAPI pipeline project is estimated to be 1,814km long, while the project implementation is expected to begin in 2015. Turkmenistan's state-owned Turkmengaz, Afghanistan's Gas Corporation, Pakistan's Inter State Gas Systems and Gas Authority of India Limited (GAIL) have recently established the TAPI Limited operating company, which will own the pipeline in the future.The pipeline is likely to export up to 33bn cbm of natural gas annually from Turkmenistan to Afghanistan, Pakistan and India over 30 years of operation. The pipeline will help Turkmenistan expand gas exports.
In September 2014, the Turkmen government announced that the production of natural gas from January to August 2014 had risen by 11.7% when compared to the volume produced during the same period of 2013. Meanwhile, exports of natural gas during the period jumped by 14.7%. The result presents some upside risk to our forecast for natural gas production to grow at a slightly more modest clip of 8.3% for the entirety of 2014.
The National Iranian Gas Company (NIGC) announced in late September 2014 that it would increase gas imports from Turkmenistan beginning in October 2014. The country had previously sent mixed messages regarding gas imports from Turkmenistan as it continues to attempt to boost domestic gas production. While it was expected that Iran would continue to require gas exports from Turkmenistan, the news reduces the near-term risk of a collapse in exports to one of the country's main export destinations. A reduction in exports to Iran would make Turkmenistan considerably more dependent on China, which is already by far the country's largest export market.