Gas Turkmenistan China Exports

Turkmenistan became China’s number one gas supplier

Being far ahead of the other regional gas suppliers, Turkmenistan became the first energy partner of China in late January 2021, ahead of Russia. In the context of generally rising gas prices at the beginning of 2021, the roles seem to be redistributed in the world of gas producers.

This article was originally published on Novastan’s French website on the 29th of March 2021.

Turkmenistan, a country with gas wealth in no need to prove, is the leader in gas supply on the Chinese energy market since the beginning of 2021, according to the Turkmen media Orient. In January 2021, a total of 2,786 billion cubic meters of Turkmen gas were delivered to China, out of the 4,685 billion cubic meters imported by the Chinese authorities. For the first months of the year, almost 60% of the Chinese gas is supplied by Turkmenistan, according to the Russian agency Interfax.

Want more Central Asia in your inbox? Subscribe to our newsletter here.

Turkmenistan is thus ahead of Russia, which supplied only 916 million cubic meters of gas to China through the “Power of Siberia” pipeline. Apart from Russia and Turkmenistan, China gets its resources from other Asian countries such as Kazakhstan and Uzbekistan, which export 319 million cubic meters and 307 million cubic meters accordingly.

Turkmen gas prices at their highest

The official figures of Turkmenistan’s exportations are difficult to find: president Gurbanguly Berdimuhamedov is usually very discreet about the country’s economic performance, so it is hard to obtain them.

Yet the data of the General Administration of Customs (GAC) of China reveals the price of Turkmen gas which appears to be one of the most expensive on the Chinese energy market. Indeed, the price of a thousand cubic meters comes to 187 dollars (£138), whereas Kazakh price is up to 162 dollars (£119.5), and Uzbek price is up to 151 dollars (£111).

Blue gold prices on the rise

The high price of Turkmen gas can be explained by the rise of gas prices on international markets. Indeed, in North-East Asia, a cold wave led to the high demand for liquefied gas. The cooling in the region had for consequences a rapid increase of gas prices on the international market: the maximum value of JKM Platts, which measures the price of liquefied gas in Asia, jumped to 1 160 dollars (£856) for a thousand cubic meters at the beginning of January 2021, according to Interfax.

The rise of energy’s value is also to be seen in Europe where the average price of gas is up to 257 dollars (£190) for a thousand cubic meters in late January, according to the Interfax agency.

Turkmenistan’s dependence on gas exportations

The fourth exporter of gas in the world strengthens its commercial relationship with China, which remains the first trade partner for Turkmenistan. In 2019, according to data furnished by the Observatory of Economic Complexity, China accounted for 82% of Turkmen exports, far ahead of Uzbekistan (4%). Regarding importations, China is second with 14,3% behind Turkey (24,7%).

This new position also strengthens Turkmenistan’s dependence on exportation. Close to being a windfall economy, the state’s incomes are based on hydrocarbon sales. According to the specialized website, 15% of consumed gas in China was Turkmen in 2020. Although economic repercussions are satisfactory nowadays, as soon as the price and foreign demand will decrease, the Turkmen economy will drop as was the case at the beginning of the pandemic. Indeed, while China’s gas suppliers are diversified, Turkmenistan’s customers are not: the country mainly exports to China and Russia.

Read more on Novastan: Agreement between Azerbaijan and Turkmenistan paves the way for Trans-Caspian Pipeline

Nevertheless, some projects are underway to diversify exportations: the Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI), which has been stalled since 2015, should be relaunched soon. Besides, with the rapprochement of Turkmenistan and Azerbaijan, the project of the Trans-Caspian pipeline is about to become reality, which means Turkmen gas will reach the European market.

Emma Collet
Writer for Novastan

Translated from French by Flavie Deschamps

Edited by Anna Wilhelmi

For more news and analysis from Central Asia, follow us on Twitter, Facebook, Telegram, Linkedin or Instagram.

Share With:
No Comments

Leave A Comment

Captcha loading...