Russian offer will ease Turkmen gas export squeeze

Outlook

Russia’s Gazprom says it will resume gas purchases from Turkmenistan in 2019, although the planned volume is unclear. Disputes with Russia and also Iran have shut down gas exports to those countries, leaving Turkmenistan over-dependent on sales to China via a 1,800-kilometre pipeline completed in 2010.

An August 2018 agreement among Caspian littoral states allows Turkmenistan to lay an undersea pipeline to take gas to Azerbaijan and onwards to Europe, but Russia and Iran may obstruct this on environmental grounds. Another export hope is the TAPI pipeline through Afghanistan to Pakistan and India. Construction has started, but continued war in Afghanistan makes completion and operation seem unlikely.

Impacts

• Russia’s offer to buy Turkmen gas may be intended to discourage Trans-Caspian pipeline plans.
• Iran is offering gas swaps to get Turkmen gas to Azerbaijan and Pakistan, again to undercut the Trans-Caspian and TAPI options.
• For now, Turkmen gas exports to Iran are blocked by international arbitration over a dispute about past debts.
• China has other import options: the Power of Siberia pipeline starting in 2019 and the Altay pipeline now under discussion.