Turkmenistan, courted by Europe as an alternative natural gas supplier able to cut its dependence on Russia, announced on Thursday it was getting down to business on building the Nabucco pipeline backed by the European Union.
Turkmenian president Kurbanguly Berdymukhamedov, meeting his counterpart from Austria, the future hub from where gas from the Caspian region will flow deeper into Europe, was in an upbeat mood.
“Today we get down to work on the contractual and legal basis for supplying Turkmen energy to Europe,” he said.
Mr. Berdymukhamedov enjoys virtually unlimited powers in his desert country, where there is no opposition or independent media, and his word is final.
“We are inclined to hold a constructive energy dialogue with Europe and we invite Austria to participate in it in the most active and effective way,” he said after talks with Austria’s Heinz Fischer.
A reclusive Central Asian nation of 5.4 million, Turkmenistan holds the world’s fourth-largest natural gas reserves and itself is seeking to diversify exports from its Soviet-era master Russia to China, Iran and Europe.
Ashkhabad plans to more than triple annual gas output to 230 billion cubic metres (bcm) by 2030, of which it would export 180 bcm. Gas from the South Iolotan field – now estimated to be the world’s second-largest – will provide much of this increase.
The Nabucco pipeline project, strongly backed by the European Union, plans to bring up to 31 bcm of gas annually from the Caspian Sea region to an Austrian hub, bypassing Russia and altering the balance of regional power supplies.
Turkmenistan had luck to discover new rich gas deposits, while there is fast rising demand in Europe,” Mr. Fischer said after holding talks with Mr. Berdymukhamedov.
British auditor Gaffney Cline & Associates (GCA) ranked on Tuesday the South Iolotan gas field as the world’s second-largest and raised its reserve estimate, underpinning Ashkhabad’s hopes to rival Moscow as a key energy supplier.
“Turkmenistan is an important supplier of natural gas, while Europe is a reliable consumer. We must put this together on mutually beneficial terms,” Mr. Fischer said.
In recent years, Europe has experienced cuts in Russian gas supplies during the winter owing to Moscow’s pricing disputes with transit nation Ukraine.
ALREADY A YEAR BEHIND?
Nabucco’s Austrian shareholder OMV said on Tuesday that the pipeline might only deliver its first gas in 2018, a year later than expected, because supply talks with potential suppliers – Azerbaijan and Turkmenistan – drag on.
“The Nabucco project is of priority significance for Austria,” Mr. Fischer said, adding that top OMV managers were part of his delegation. “As far as I understood, you are optimistic about it,” he said to Mr. Berdymukhamedov.
Turkmenistan has started building a $2-billion (U.S.), 1,000-kilometre East-West pipeline from South Iolotan to the Caspian to be able to feed the Nabucco project, Mr. Berdymukhamedov said, adding that “construction works are proceeding at a quick pace.”
Britain’s GCA said that the South Iolotan field, which should allow the Central Asian nation to become a major gas supplier to Europe and China, contained between 13.1 and 21.2 trillion cubic metres (tcm) of natural gas.
Mr. Berdymukhamedov said that South Iolotan’s reserves, combined with those of two other fields, Yashlar and Minara, totalled 26.2 tcm.
Nabucco’s other shareholders include Germany’s RWE, Hungary’s MOL, Turkey’s Botas, BEH of Bulgaria and Romania’s Transgaz . Germany’s Bayerngas is in talks to join.