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Turkmenistan  

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Last Updated: July 2016

Overview


Map of Turkmenistan
Map of Turkmenistan
  • Turkmenistan is one of the five Caspian Sea littoral countries, an area with large volumes of oil and natural gas reserves.
  • Despite its vast oil and natural gas resource base, Turkmenistan is not a major player in energy markets because of the lack of infrastructure, limiting its exporting capabilities. In the past several years, the country has been increasing investment to develop its reserves and export more natural gas to countries such as China.
  • Foreign companies are allowed to participate in Turkmenistan’s oil and gas sector only when they partner with the state-owned Turkmenneft, the largest oil producer in the country, or Turkmengaz, the state-run natural gas company. Foreign partnerships often take the form of production-sharing agreements (PSA) and are generally for offshore resources. China’s CNPC is the only foreign company that has an onshore natural gas PSA with Turkmenistan according to the Oil and Gas Journal.
  • Total primary energy consumption in Turkmenistan was 1.48 quadrillion British thermal units in 2015 and has almost doubled over the past decade, according to the BP Statistical Review of World Energy 2016. Natural gas accounted for approximately 83%, and petroleum products 17% of total energy consumption.

Oil

  • Turkmenistan had an estimated 600 million barrels of proven oil reserves as of January 2016, according to the Oil and Gas Journal. The country’s estimated total petroleum and other liquids production in 2015 was 261,000 barrels per day (b/d), an increase from 2014, which averaged 249,000 b/d according to the BP Statistical Review of World Energy 2016.
  • Turkmenistan has two oil refineries, the Seidi and Turkmenbashi, with a total crude oil distillation capacity of almost 237,000 b/d.
  • Turkmenistan has a small domestic crude oil pipeline network linking onshore oil fields with the Turkmenbashi refinery and Caspian ports. Turkmenistan has virtually no international oil pipeline infrastructure except a pipeline between the Seidi refinery in northeastern Turkmenistan and the Shymkent refinery in Kazakhstan via Uzbekistan.

Natural gas

  • Turkmenistan had estimated proven natural gas reserves of 265 trillion cubic feet (Tcf) as of January 2016. It is the sixth largest natural gas reserve holder in the world according to the Oil and Gas Journal, and was among the top 15 dry natural gas producers in 2015.
  • In 2015, two new fields, Garakel and Bagli, were discovered near the Galkynysh field. These fields are estimated to hold 42 Tcf of recoverable resources according to the Ministry of Oil and Gas of Turkmenistan.
  • The country has several of the world’s largest natural gas fields, including 10 with over 3.5 Tcf of reserves. These fields are located primarily in the Amu Darya basin in the southeast, the Murgab Basin in the south, and the South Caspian basin in the western part of the country.
  • Turkmenistan produced more than 2.5 Tcf of dry natural gas in 2015. The Galkynysh natural gas field is the world’s second largest gas field. In September 2013, Turkmenistan announced the start of commercial production at Galkynysh. The first phase of development started in 2013 with production reaching roughly 1 Tcf at full capacity. The second phase introduced in 2014 is following the same plan as phase one. Phase three is planning to add over 1.2 Tcf of natural gas production from the Galkynysh field. The Turkmen energy ministry plans to produce about 3.3 Tcf per year from the Galkynysh field when all three phases are completed.
  • Among the Caspian and Central Asian countries, Turkmenistan has become a leading natural gas exporter. Turkmenistan exported 1.3 Tcf via pipeline in 2015. More than 70% of exports went to China, with Russia and Iran also importing natural gas from Turkmenistan.
  • Turkmenistan has signed several natural gas contracts with China, most recently in September 2013, and is slated to supply 2.3 Tcf of natural gas to China by 2020 through a network of parallel gas pipelines running through Central Asia called the Central Asia-China Pipeline (CACP). The CACP currently has the potential to deliver about 1.9 Tcf per year of natural gas starting in Turkmenistan, transiting through Uzbekistan as well as Kazakhstan, and finally entering western China.
  • In 2015, Turkmenistan built the East-West pipeline that connects the Galkynysh field to the eastern coast of the Caspian Sea. East-West has a capacity of about 1 Tcf and is situated where the proposed Trans-Caspian Pipeline (TCP) would link with Turkmenistan. East-West is being used to deliver gas to consumers within Turkmenistan and could also be used to send natural gas from western Turkmenistan to China.
  • The TCP, which is a proposed undersea pipeline, would provide an outlet for Turkmenistan’s natural gas to reach the European market by connecting to existing pipelines in Azerbaijan. Political issues have prevented construction of the TCP. The pipeline would have capacity of about 1 Tcf.
  • In December of 2015 Turkmenistan began construction on its section of the Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI). This pipeline is to start at the Galkynysh field in Turkmenistan and end in northern India. The pipeline has a proposed capacity of more than 1 Tcf per year and is officially scheduled to come online in 2019. However the pipeline faces significant security and political hurdles.
  • According to Turkmenistan’s Ministry of Oil and Gas, a joint project between Turkmen and Japanese experts constructing 10 grassroots industrial plants across several locations in Turkmenistan has been completed. These plants are expected to process gas for the production of 17 products. Another consortium is building a separate grassroots petrochemical complex in Kiyanly. This complex is expected to startup in 2018 and use gas coming from the shelf of the Caspian Sea to produce ethylene, polyethylene, and polypropylene.

Electricity

  • The electricity sector in Turkmenistan is controlled by the Ministry of Energy and Industry and is fueled almost entirely by natural gas. The country’s total installed generation capacity was nearly 5.2 gigawatts as of April 2016.
  • Turkmenistan’s electricity generation exceeds domestic electricity consumption, allowing the country to export the remaining production. In 2015, the country produced more than 22 billion kilowatt hours (BKwh) and exported 3.2 BKwh. Turkmenistan is linked to the Central Asian electricity grid and exports electricity to Afghanistan, Iran, and Turkey among other Central Asian countries.
  • In 2013, the government developed a policy of modernizing and expanding its electricity sector by increasing transmission infrastructure and constructing 14 natural gas-fired electric power plants between 2013 and 2020. As of April 2016, Turkmenistan has 12 thermal power plants in operation.
  • Turkmenistan plans to increase power generation from 19 BKwh in 2011 to 27 BKwh in 2020 and 35.5 BKwh by 2030.