Gas sector investment opportunities in Turkmenistan: TAPI and new projects of interest

Gas and Renewables in Emerging Economies Series

26 May 2021, 12-2 PM CET

Zoom video conference

For most avid energy security followers in Brussels, gas and renewables have long become a topic highly inter-twined on the one hand, if not a marriage of convenience on the other. During the period spanning roughly the years 2000-2010, very few of us could fail to keep a close eye on key gas supply security developments, bearing in mind those game changing supply disruptions emanating from the east. These led to our subsequent efforts to build an Energy Union and efforts to mitigate, in the midst of the growing shadow of the Shale Revolution from across the Atlantic. In the ensuing decade, as the drive towards sustainable energy culminated in the Paris agreements on climate, renewables have tended to super-cede gas as the new buzzword — the fashionable shade of green now somewhat outshining the flammable vision of blue.

Yet, while policy makers in Europe continue to push for renewables largely at the expense of fossil fuels, at the more global level gas and renewables are likely to coexist for quite some time. Indeed, spurred on by a bourgeoning, pre-Covid international LNG trade, demand for investment into a diversity of gas projects remains both politically and commercially desirable — directly in parallel to many governments likewise seeking to attract investment into renewable energy generation. This could, and should, create a more dynamic and diversified set of opportunities for energy investors to choose from, particularly in the emerging markets. We are, after all, living thorough an era of an "energy transition" and participating in the great changes taking place in the market is more desirable for many than merely observing from the side-lines.

The gas business and investment prospects in Turkmenistan

In our next interactive discussion in the BREC gas and renewable emerging energy market series, we focus on Turkmenistan, one of the world"s core gas producing countries. This year Turkmenistan will celebrate 30 years of its independent statehood, an impressive occasion to be celebrated. Turkmenistan and its gas industry are, in many ways, inseparable. For this young country, the natural gas industry has proven to be not only the engine driving its domestic economic growth, it has also been a key driver consolidating upon Ashgabat"s international standing. Turkmenistan has not only succeeded in diversifying its gas export routes, it has also shown leadership in wider-Asia by championing a true regional gas development strategy. Moreover, Turkmenistan now emphasises that economic, social and humanitarian development should be key end goals of its regional gas strategy. These are no less important than purely commercial objectives, which apply with particular reference to Afghanistan, where peace and stability is key for regional prosperity.

In this context, substantial attention has been accorded to the country"s flagship project, the Turkmenistan, Afghanistan, Pakistan, India (TAPI) gas pipeline, works on which are currently well under way. The 1,635-km TAPI Pipeline Project will transport up to 33 billion cubic meters (bcm) of natural gas per year from the Galkynysh gas field in Turkmenistan to three off-take points in Afghanistan (located at Herat, Helmand and Kandahar), three offtake points in Pakistan (located at Quetta, Multan and Jahanian), and a final off-take point at the Pakistan-India border in order to supply the Indian market.

The pipeline will be operated and maintained by TAPI Pipeline Company Limited (TPCL), with support from SC Turkmengaz, pursuant to a technical support agreement, which will provide for secondment of experienced SC Turkmengaz personnel. TPCL has been established to build, own and operate the Afghanistan and Pakistan sections of the pipeline. TPCL shareholders are SC Turkmengas (85%), Afghan Gas Enterprise (AGE) (5%), Inter State Gas Systems (Private) Limited (ISGS) (5%) and GAIL (India) Limited (GAIL) (5%).

The ensuing BREC meeting will allow participants to learn more about the project"s current evolution first-hand from the Project"s consortium leader and the SPV deeply engaged in project development. The meeting will also present a rare opportunity to overview the state of cutting-edge investment plans in the country"s gas sector more broadly, including those currently prioritized by the government. We will also explore questions about Turkmenistan"s energy policies more broadly, including the country"s interest in the development of renewable energy within the context of the energy transition.

Program of the meeting

Speech by the Ambassador of Turkmenistan to the EU, H.E. Tchary Ataev
Presentation by the Deputy Chairman of State Concern "Turkmengas", Guvanch Agajanov
Presentation by the CEO of "TAPI Pipeline Company Limited" (TPCL), Muhammetmyrat Amanov
Special comments by the Ambassador of Afghanistan to the EU, H.E. Nazifullah Salarzai
Expert-level roundtable discussion with members and guests of the BREC