Fuel and energy complex of Turkmenistan: Innovations and export potential
Oil and gas industry is a leading branch of national economy, which has an important role in implementation of the programmes of industrialization of the country on innovative base, expansion of its export capabilities. Number of major infrastructural projects aimed at diversification of national fuel and energy complex, strengthening of its positions in the world energy markets are to be implemented in the next several years. Multidimensional potential of oil and gas sphere of Turkmenistan will be presented at the First Caspian Economic Forum soon.
International cooperation in energy sphere is a priority of economic strategy of Turkmenistan, which is on the fourth position in the world in natural gas reserves. The policy in this sphere is built on the long-term principles of transparency, taking into consideration national interests and mutual responsibility.
Constructive approach to beneficial partnership and international initiatives of Turkmen leader received wide support of the world community. This is visually indicated by the Resolution “Reliable and stable transit of energy carriers and its role in provision of sustainable development of international cooperation”, which was adopted two times by the United Nations General Assembly.
Several times, the President initiated major international projects, which are to take trade and economic partnership between the countries of Central Asia and neighbouring regions to new level, to support the strengthening of their energy security as well as to solve the issues in environment protection, transit to use of eco-friendly energy.
Capacities of Turkmenistan – Uzbekistan – Kazakhstan – China gas line are steadily increased according to interstate agreements. Almost 280 billion cubic meters of gas were exported from Central Asia to the PRC as of June 30, 2019 from the moment of its opening in December 2009. More than 80 percent of this volume was from Turkmen gas fields, which are operated by the State Concern Türkmengaz.
At present time, the resource base of transnational line, which construction serves as an example of long-term, constructive and fruitful interstate cooperation aimed at specific result, is improved.
This, new fields are introduced gradually at Bagtiyarlyk contractual territory, which exploration, development and production is carried out by the Chinese National Petroleum Company (CNPC) based on the Production Sharing Agreement. Seismic survey on the right bank of Amudarya River, drilling of exploration and production wells allowed discovering big gas deposits.
The project of construction of the fourth D section of Central Asia – China gas line, which will be built along Turkmenistan – Uzbekistan – Tajikistan – Kyrgyzstan route, has entered the phase of practical implementation. After the commissioning of the line, total throughput capacity of the main will be increased up to 85 billion cubic meters and the export of Turkmen gas to the PRC up to 65 billion cubic meters per year.
The project of Turkmenistan – Afghanistan – Pakistan – India (TAPI) has huge geographical political and economic significance. New energy line is not only to provide long-term supply of Turkmen gas to the biggest South Asian countries but also to become a strong stimulus for further social and economic development of entire region, strengthening of peace, stability and security.
It has special importance for peaceful restoration of Afghanistan, reconstruction of its social and economic infrastructure, solution such current issues as creation of new work places, which, in its turn, will support the enhancement of life level of the population. In addition of certain gas volumes, our southern neighbour will receive significant commercial benefits for transit of Turkmen energy carriers across its territory.
It is worth reminding that the Resolution, which notes the importance of the initiatives of Turkmen leader on international projects in transport and energy spheres, in particular, on construction of Turkmenistan – Afghanistan – Pakistan – India gas line, Kerky – Imamnazar – Akina railroad, Afghanistan – Turkmenistan – Azerbaijan – Georgia – Turkey international transport corridor, has been adopted at the session of the UN Security Council in March 2018. The Asian Development Bank renders active support to the latter project by granting beneficial credits.
The construction of 205-km section of Turkmen part of the TAPI, which total length is approximately is 1,840 km, is carried out rapidly. Preparation to construction works of the gas line in Afghanistan and Pakistan is carried out. This project includes two phases. The first phase will provide free flow of 5 – 6 billion cubic meters of gas and after construction of compressor stations, the annual output of the TAPI will be increased up to 33 billion cubic meters.
Continuing the subject it is worth to mention that gas supply to Russian Federation by Central Asia – Centre gas line has been resumed in the middle of April. Five-year contract with Gazprom on procurement of natural gas from the State Concern Türkmengaz has entered into force from July 1.
The project of Trans-Caspian gas line is also in the agenda. After signing of the Convention on Legal Status of Caspian Sea, the work in this direction has been activated for development of the mechanism of delivery of Turkmen gas to European markets. The European Union Delegation, which was established according to the Agreement signed between the Government of Turkmenistan, the European Union and European Atomic Energy Community, is to support to this project.
Together with the diversification of supplies of energy resources to the world markets, increment of production volumes of oil and gas, strengthening of resource base of the industry by discovery of new hydrocarbon deposits, activation of drilling and major overhaul of wells by attraction of specialized foreign companies and their investments, are among current objectives in the near term.
Industrial development of the largest in the world Galkynysh gas deposit, which reserves together with yashlar and Garakyol fields are estimated in 27 trillion cubic meters, is one the biggest investment projects related to the increment of resource base of the industry.
At present time, operation fund of the field, which area is more than 4,000 square kilometres, has more than 40 wells, which production output is 2,000,000 cubic meters of gas per day in average. Complex of facilities, which provides the production of 30 billion cubic meters of sale gas per year, has been put into operation in this place. Similar complexes of the same capacity, which are to provide the TAPI line, are under construction at present time. drilling of new exploration and production wells is continued.
The world biggest companies like Hyndai Engineering and LG Internatinal Cоrporation (the Republic of Korea), CNPC (the PRC), Petrofac International and Gulf Oil & Gas Fze (UAE) took part in the development of Galkynysh field at different stages.
In addition, there is Framework Agreement between the State Concern Türkmengaz and consortium of Itochu Corporation, JGC Corporation, Mitsubishi Corporation, Chiyoda Corporation, Sojitz Corporation (Japan), Çalik and Rönesans (Turkey) on the project of construction of facilities under the development of this field.
The territory of Turkmenistan presents big interest these days in search for new hydrocarbon deposits. Geological survey works on existing fields aimed at the study of deep structures, up to 7 km, have been resumed.
In particular, seismic 3D surveys using modern equipment and software have been carried out at Goturdepe Field including adjacent shallow parts of Caspian Sea in the west of the country. in addition, 2D seismic survey works have been carried out at Darja territory, which is almost 870 linear kilometres. Barsagelmes Field is the next in a row, where seismic survey will cover 345 square kilometres.
Northern Goturdepe Field, where new layer of oil on more than 4 km depth has been discovered, is an example that proves the future of this direction of works. It is planned to drill 60 exploration and production wells, including directional and horizontal wells, under the first phase of new investment project, which is realized by the State Concern Türkmennebit together with Yug-Neftegaz Company registered in Singapore. Drilling of the first well has started in June this year.
Specialists of the State Concern Türkmennebit have drilled two wells, which depth is more than 7 km, at Uzynada field, which is also located in Caspian region and received industrial flow of hydrocarbon resources. Similar wells are the first in the history of oil and gas industry of Turkmenistan and the deepest in Central Asia as for today. At the same time with oil men, departments of the State Corporation Türkmengeologiýa also carry out exploration works in this place drilling two super deep wells.
Memorandum of Understanding between the State Concern Türkmennebit and ARETI International Group of Companies on cooperation in development of this field has been signed in March this year.
New Tajibay Field was opened in the southeast of Turkmenistan in Lebap Velayat. Unlike the western region, the concentrations of gas in this place are in small depths and easy in term of development. What is important, the gas is free of sulphur in this place. The first wells drilled by the specialists of the State Corporation Türkmengeologiýa have opened productive layer at the depth of 2,400 meters, having given industrial flow of gas to the amount of 475 – 500 thousand cubic meters.
Big perspectives are related to the fields of Turkmen section of Caspian Sea. The experts estimate their reserves in 12.1 billion tons of oil and condensate as well as 6.1 trillion cubic meters of gas. Petronas Carigali (Turkmenistan) from Malaysia, which carry out exploration and production of hydrocarbons at Block 1Contractual Territory, actively works in this place. Total volume of investments is 11 billion US dollars. At present time, production of oil and gas is carried out at Magtumguly and Diayrbekir Fields. Activation of drilling in the western part of Garagol Deniz Field is in the future plans.
All conditions has been made in oil and gas industry for efficient work of foreign partners, therefore, the interest of the world business structures in our country is growing. For example, Dragon Oil (Turkmenistan) Ltd, the affiliate of Dragon Oil (UAE) develops Jeytun and Jugalybek Fields, which are the part of Cheleken Contractual Territory. big volume of works has been carried out in this place for modernization and development of offshore oil and gas infrastructure. Speaking in number, more than 6.6 billion US dollars have been invested for these purposes in total.
These days, both PETRONAS and Dragon Oil hold the talks on the extension of existing contracts, which have been signed according to the Law of Turkmenistan on Hydrocarbon Resources. The companies presented number of commercial proposals on this account.
In addition, there are the Production Sharing Agreements at number of offshore blocks with Buried Hill (Cyprus), RWE and Wintershall (Germany), ARETI (Headquarter in Geneva, Switzerland). Fruitful cooperation has been established with Italian ENI (Nebitdag Contractual Territory) and Austrian Mitro International (Hazar Consortium), which work for many years in Caspian region).
The contract of the State Concern Türkmennebit with Russian Tatneft Joint Stock Venture on provision of services for overhaul maintenance of wells and improvement of debit of oil-bearing layers at Goturdepe Field has been extended. Addition recruitment of Turkmen specialist for work in the branch of Tatneft has been made under the contract. Specialized equipment has been ordered and started to be delivered. The opportunity of expansion of works according to the Memorandum of Understanding signed during working visit of President Gurbanguly Berdimuhamedov to the Republic of Tatarstan is under review.
At the same time, big activity is carried out for diversification of oil and gas sphere, construction of big industrial facilities, which specialize in processing of hydrocarbon resources including in petrochemical and chemical spheres and power energy.
Last year, polymeric plant has been put into operation in Kiaynly. This super modern petrochemical complex was built by the work order of the State Concern Türkmengaz by LG International Corporation and Hyundai Engineering (the Republic of Korea) with participation of TOYO Engineering Corporation (Japan). Production output of the facility allows processing 5 billion cubic meters of gas and producing 386,000 tons of high-density polyethylene and 81,000 tons of polypropylene.
Innovative orientation and safety for environment of the project are proven by the Certificates of Julius Kühn Institute (Germany), Paul Scherrer Institute (Switzerland) and the Healthy Environment Fund (USA).
It is remarkable that the production of the facility, which is placed for sale at the State Commodity and Raw Material Exchange, raised great interest of business circles from different countries. According to the information of Federal Customs Service of Russian Federation, Turkmenistan has become one of the biggest suppliers of polymers to Russian Federation.
Big package of documents including on cooperation in energy sphere has been signed during the visit of President of the Republic of Korea Moon Jae-in to our country in April this year. In particular, NaPeCo National Petroleum Company and LG International have reached the agreement on establishment of joint venture for sale of production of this petrochemical complex in the world markets.
In addition, the Ministry of Textile Industry of Turkmenistan and Korean Industrial Technologies Institute will study the opportunity of opening of synthetic fibre production facility including from the polymers produced at the plant in Kiaynly. Therefore, full chain from production and processing of raw materials to manufacturing and sale of high-added value production will be made in gas sphere.
Big Japanese companies successfully work in Turkmenistan for many years. World famous companies from the Country of Raising Sun, goods of Japanese producers occupy good position in Turkmen markets. In this aspect, the commissioning of the first in the world plant for production of synthetic gasoline from natural gas was a remarkable event.
Marketing strategy of this unique complex, which was built by purchase order of the State Concern Türkmengaz by the consortium of Kawasaki heavy Industries Ltd. (Japan) and Rönesans (Turkey), is under development at present time.
It is worth reminding that the plant is designed for production of 600,000 tons of eco-friendly ECO-93 gasoline meeting EURO 5 standard as well as produces 12,000 tons of sulphur-free diesel fuel and 115,000 tons of liquefied gas from associated products. Number of European countries has already expressed the interest in this production.
The industrial complex has been entered to the Guinness Record Book as the First in the World Plant for Production of Gasoline from Natural Gas as well as has been awarded with the Certificate of Innovative Technologies of Swiss Federal Technological Institute and Environmentally Friendly Certificate of the Environment Protection Fund (USA).
As it has been mentioned, presentation of new projects planned to be implemented in oil and gas industry of the country would be held under the First Caspian Economic Forum. Meetings and talks with potential investors and partners, which will also be held in the fields of the Forum, will be dedicated to this subject.
For example, it is planned to build new technological facilities at Turkmenbashy Refinery Complex, which will allow processing of oil to 90 percent, increasing volume of production of high-quality gasoline, base technical oil and other petrochemical production.
In addition, technical and economic feasibility of the production of benzene at Seydi Refinery for its further use as raw material in production of valuable production such as polystyrene and rubber, which are on high demand in the world market, is under study.
Range of projects like the second polymeric plant in Balkan velayat and the second train of the facilities for production of synthetic gasoline in Ahal velayat, plant for production of rubber and polystyrene in Lebap Velayat as well as PVAC and methanol production facility in Dashoguz Velayat is planned to be implemented in gas industry.