The Chinese and Turkmen state-owned oil and gas companies are planning to sign additional agreements to the existing contracts to install specialized equipment and provide relevant services at Turkmenistan's gas fields.
"Addendums to contracts between Turkmengaz and CNPC [The China National Petroleum Corporation] regarding the installation of specialized equipment and the provision of relevant services at the Galkynysh, Garabil, and Bagaja gas fields are expected to be signed," Chronicles of Turkmenistan reported on January 29.
The report also reads that the total amount of these agreements will reach $106.2 million.
In addition, Turkmengaz and CNPC will sign additional agreements to change the terms of payment for several services, including the supply of 16 wells at the Galkynysh gas field with chemical products and the preparation of drilling fluids, as well as the provision of engineering services for wells exploitation, and well equipment provision.
At a government meeting on January 28, Turkmenistan's President Gurbanguly Berdimuhamedow stressed the importance of using modern technologies when drilling new wells. He also said that investments should be recovered from the country's natural resources.
During the meeting, President Berdimuhamedow also approved the roadmap for the development of international cooperation of Turkmenistan in the field of hydrogen energy covering 2022-2023. While signing a resolution to approve the roadmap, the president stressed the need to actively promote energy diplomacy as an integral factor in strengthening mutually beneficial partnerships in ensuring global energy security.
In recent years, China has increased its economic presence in Turkmenistan and is currently heavily involved in the Central Asian country's natural gas sector.
In December 2009, state-owned Turkmengaz signed contracts with multiple companies, including Chinese CNPC Chuanging Drilling Engineering Company Limited. The documents provided for the design and construction of production wells and surface facilities at the Galkynysh field. The State Development Bank of China (CDB) allocated $8.1 billion in loans to accelerate these activities. Under the agreement, Turkmenistan was supposed to supply gas to China to pay off the loan.
The Galkynysh gas deposit, located in Mary province in the southeast, is considered one of the biggest in the world and may hold more than 27 trillion cubic meters.
Gas from the Galkynysh field is supplied to China via the Central Asia-China pipeline. The pipeline is designed to deliver 40 bcm of gas annually, while the capacity of its three strings may reach 55 bcm per year. Earlier in January, President Berdimuhamedow said Turkmenistan was ready to increase gas supplies to China. According to previous agreements, the Turkmen gas supplies to China are expected to grow to 65 bcm a year once the fourth string of the pipeline is ready.
As part of the first stage of the industrial development of Galkynysh, 22 wells and two gas processing complexes were built, with a total capacity of 30 bcm per year. In total, three phases of field development are envisaged at Galkynysh.
Last August, Berdimuhamedow launched the construction of three new wells at the Galkynysh field under the contract between Turkmengaz and the CNPC. This project is designed for 30 months. Turkmenistan will supply 17 bcm of natural gas to China for three years to pay off the company's services.
Officials in Turkmenistan are currently developing the energy industry. The lion's share of the country's GDP is primarily derived from hydrocarbons, particularly natural gas – the bulk of which goes to China.
On January 26, President Berdimuhamedow ordered the Central Bank to give the Turkmengaz and Turkmengeologiya (Turkmen Geology) state-run companies over $67 million in loans to develop the oil and gas sector.
The president instructed Turkmengaz to constantly monitor the growing demand for Turkmen natural gas, plan short and long-term natural gas production, fully meet local consumers' demand for natural gas, and carry out Turkmenistan's contractual obligations on gas supplies to foreign markets.
Turkmennebit, the state concern of Turkmenistan, recently agreed with the Russian company Tatneft to increase production at the onshore Goturdepe oil and gas field. According to Deputy Prime Minister of Turkmenistan Shahym Abdrakhmanov, an additional agreement will be signed on the provision of services aimed at increasing the capacity of existing oil wells in the Goturdepe area. Turkmennebit and Tatneft have been cooperating at the Goturdepe field for more than 13 years.
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