China, Turkmenistan Advance Galkynysh Gas Field Phase 4 with 10 Bcm Capacity
China and Turkmenistan are advancing a major gas field expansion that will add 10 bcm of supply. The project supports continued pipeline flows to China and broader regional export growth.
(Reuters) - Turkmenistan's state gas company and China's CNPC signed a deal on Thursday to build the fourth phase of Turkmenistan's Galkynysh gas field, which produces much of the country's annual 30 billion cubic meters in gas exports to China.
Under the deal, CNPC will build a facility for processing an additional 10 Bcm of commercial gas per year at the field in the deserts of eastern Turkmenistan, along with drilling new production wells.
A Turkmen government source told Reuters the project will be entirely financed by Turkmenistan. Turkmengaz head Maksat Babaev told Reuters that it will cost $5.1 billion, and service both domestic and export markets.
No further details on the deal were available.
Turkmenistan, a mostly desert former Soviet republic that borders Iran and Afghanistan, has the fourth largest natural gas reserves in the world, with the bulk of its exports going to China.
At the ceremony, attended by journalists, Chinese Vice Premier Ding Xuexiang said: "China is ready to enhance the quality of energy cooperation with Turkmenistan."
Chinese state news agency Xinhua cited Ding as calling on both sides to take a strategic, long-term view of gas cooperation, urging an expansion of the scale of natural gas cooperation while improving its quality and efficiency.
Both countries have said that a potential fourth branch of the pipeline from Turkmenistan to China is under discussion, though the Line D project has been long delayed.
Turkmen officials have said they are keen to develop additional pipeline infrastructure to diversify their exports.
Ashgabat is building a pipeline to the Afghan city of Herat that it hopes may one day extend to Pakistan and India, and says it backs proposals for a Trans-Caspian pipeline to Europe via Azerbaijan and Turkey.