Amid global economic changes and growing energy needs, Turkmenistan has announced a significant increase in demand for its natural gas. This was announced by Maksat Babayev, Chairman of the Turkmengas State Concern, at a meeting with journalists in Ashgabat after the end of the international oil and gas conference. He emphasized that interest in Turkmen gas is growing from different sides – northern, western and eastern. The official noted:
“We negotiate with potential buyers and countries on a daily basis, so various development scenarios are possible.”
Termination of the gas agreement with Russia
One of the main topics of discussion was the termination of the gas agreement with Russia. Maksat Babayev confirmed that Turkmen gas supplies to Russia had been suspended since the middle of this year. Russian media reported that the parties had not reached an agreement on the price of the supplied gas. Back in 2016, Russia temporarily suspended purchases of Turkmen gas, but in 2019, after a three-year break, a new agreement was signed on five-year supplies of five billion cubic meters of gas annually. This agreement expired on June 30, 2024, and the contract was not extended. Deputy Chairman of Turkmengaz Murat Archayev also confirmed that the termination of exports was a decision of both parties.
Turkmenistan is focusing on diversifying gas export routes. Turkmen officials say they are expanding existing and searching for new export routes. Among them is a recent agreement with Iran and Iraq, which provides for the supply of up to 20 million cubic meters of gas per day under a swap scheme. Initially, the volume of exports to Iraq was discussed at the level of 9-10 billion cubic meters per year, but the final agreement reduced this figure to 7 billion cubic meters per year. It is planned to begin deliveries to Iraq by the end of the year, which will be an important step in ensuring stable gas exports. Turkmenistan continues to supply gas to Uzbekistan, which has significantly increased its import volumes since the beginning of the year. According to Uzbek media, from January to August 2024, gas imports from Turkmenistan and Russia increased by 5.7 times, reaching a total value of $1.15 billion.
However, the exact data on Turkmenistan’s share is not disclosed. The possibility of exporting gas to Kazakhstan is also being discussed, as stated by Murat Archayev, noting that negotiations are planned to begin in the near future. The parties are ready to discuss the terms of cooperation on a commercial basis.
China remains the main consumer of Turkmen gas. Since 2009, Turkmenistan has supplied 415 billion cubic meters of gas to China, which underlines the importance of this direction for the Turkmen economy.
According to representatives of Turkmengaz, who spoke at the conference, in 2023, the volume of natural gas production in the country amounted to 80.6 billion cubic meters, and by 2029 it is planned to increase production to 116 billion cubic meters. Turkmenistan also plans to export up to 40 billion cubic meters of gas annually to the European Union, Turkey and Iraq. Murat Archayev stressed that Turkmenistan is ready to supply gas to international markets under swap agreements.
Despite its huge natural gas reserves — Turkmenistan ranks fourth in the world in this indicator — the country faces serious economic difficulties. The local population, with its rich natural resources, continues to live in poverty, not receiving the benefits they deserve. Instead of improving the lives of citizens, the proceeds from the sale of gas are often used to create monuments and glorify the Berdimuhamedov family. The authorities spend significant amounts of money on the construction of luxury facilities, while the majority of people suffer from a lack of basic services and opportunities for a decent life.
As you can see, Turkmenistan faces a number of challenges and opportunities. The desire to diversify export routes and negotiations with new countries on gas supplies indicate a pragmatic approach of the Turkmen government to the development of the gas sector. However, deep economic instability and insufficient attention to the needs of the population require greater efforts from the authorities to achieve stability and sustainable growth. Without a fair distribution of the benefits of natural resources, the country’s future may remain at risk.
