China and Turkmenistan Sign Deal to Build Phase Four of Galkynysh Gas Field

Turkmenistan’s state gas company - and China’s CNPC - signed a deal 'on Thursday' to build the fourth stage of Turkmenistan’s Galkynysh 'gas field. This field produces a large % of Turkmenistan’s annual '30 'billion cubic meters' in gas exported to China.

The agreement stipulates that CNPC will construct a facility to process an additional 10 bcm commercial gas each year in the deserts east Turkmenistan and drill new production?wells.

Turkmen source said that the project would be financed entirely by?Turkmenistan. Turkmengaz's Maksat Babaev said that the project will cost $5.1billion and serve both domestic and export markets.

The deal was not further disclosed.

Turkmenistan is a largely desert ex-Soviet?republic bordering Iran and Afghanistan. It has the 4th largest natural?gas reserve in the world. The bulk of its?exports go to China.

Ding Xuexiang, Vice Premier of China, said at the ceremony attended by journalists: "China is willing to enhance the quality energy cooperation with Turkmenistan."

Ding was quoted by the Chinese state-run news agency Xinhua as calling for both sides to adopt a?strategic, long-term approach to gas cooperation. He urged an expansion of natural gas collaboration while improving its 'quality and efficiency.

Both countries said that they are discussing a fourth branch of the pipeline from Turkmenistan into China, even though the Line D project is long overdue.

Turkmen officials have stated that they would like to build additional pipeline infrastructure in order to diversify their products.

Ashgabat has begun building a pipeline from the Afghan city of Herat to Pakistan and India, which it hopes to one day extend. It also supports proposals for a Trans-Caspian Pipeline to Europe via Azerbaijan. Marat Gurt, Ashgabat newsroom and Felix Light and PhilippaFletcher, writing.

(source: Reuters)