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Turkmen Gas Deal Could Save Europe

The European Union is looking for ways to diversify its source of gas to reduce its dependence on Russia. Turkmenistan is looking for ways to diversify the customer base for its gas to increase sales.

Now it appears the two have agreed to address both needs using Turkey’s proposed Trans-Anatolian Natural Gas Pipeline (TANAP).

EU Energy Commissioner Maroš Šef?ovi? said on May 1 in an interview with Reuters in Ashgabat, the Turkmen capital that Europe expects to begin receiving Turkmen gas as early as 2019. “We have (a) good mutual understanding,” he said.

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Šef?ovi? said he didn’t yet know just how much Turkmen gas would be shipped to Europe. But officials in Ashgabat have said Turkmenistan and the EU have been negotiating a deal under which EU countries would receive between 10 billion cubic meters and 30 billion cubic meters of gas per year.

For now, Russia supplies about one-third of Europe’s gas needs, half of it shipped by pipeline through Ukraine. But the EU has been searching for alternate sources for more than a year, as relations between Kiev and Moscow soured to the point where Russia annexed Ukraine’s Crimean peninsula and became involved with armed separatists in eastern Ukraine.

Turkmenistan also needs diversity because Russia, one of its major customers, plans to drastically reduce its imports of Turkmen gas from 11 billion cubic meters in 2014 to 4 billion cubic meters this year. Turkmenistan has the world’s fourth-largest proven reserves of gas.

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Turkey’s president, Recep Tayyip Erdogan, has said that the TANAP conduit would be able to accommodate gas from Turkmenistan. It was built primarily to handle gas from Azerbaijan, west of the Caspian Sea, but Erdogan says he sees no reason why it can’t handle additional gas from Turkmenistan, which lies just east of the Caspian.

“TANAP can transport gas both from Azerbaijan and Turkmenistan via Turkey to Europe,” Erdogan said during a visit to Ashgabat six months ago.

That would require laying a gas pipeline less than 200 miles long beneath the Caspian from Turkmenistan to Azerbaijan, then connecting with the existing South Caucasus Pipeline and eventually with TANAP, which has yet to be built, eventually carrying gas to European customers. The Caspian leg of the conduit is expected to cost as much as $5 billion.

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Rovnag Abdullayev, the president of the State Oil Company of Azerbaijan (SOCAR), has offered to supply Turkmenistan with all the hardware it may need to make the project happen.

Šef?ovi?, meanwhile, says that if all goes according to plan, “The European Union expects natural gas supplies from the Caspian region to Europe to begin in 2019 or 2020.”

Even the environmental risks of building the trans-Caspian pipeline have been addressed, Šef?ovi? said. Iran and Russia, which also border the sea, say the pipeline could harm it. But Šef?ovi? says the EU and the World Bank have studied the matter and found “technologies which are reliable from the point of view of ecology.”

By Andy Tully of Oilprice.com

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