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Visiting Chinese Leader Cements Hold on Gas Sector

China's President Xi Jinping has started his first visit to Central Asia in Turkmenistan, where he has sealed a major new deal, securing Beijing's status as the chief client of the country's lucrative and expanding gas sector.

Xi and his host, President Gurbanguly Berdymukhamedov, agreed to roughly triple Turkmen gas exports to China by 2020. "Energy cooperation is a highlight in China-Turkmenistan relations, which fully testifies to the high level of political mutual trust between the two sides," Xi said in comments published by Chinese state media. In return, Turkmen state media quoted Berdymukhamedov as saying that China is a priority for Turkmenistan.

On September 4 the two leaders launched processing facilities at the world's second-largest field, Galkynysh, in eastern Turkmenistan. "The combined capacity of the new facilities is designed to ensure reliable and long-term supplies of Turkmen natural gas to China," Turkmenistan's TDH state news agency reported.

Turkmenistan is already China's largest foreign gas supplier: It delivered over half of Chinese imports, or 21.4 bcm in 2012, and has been ramping up gas deliveries since China completed a 1,833-kilometer pipeline connecting the two countries in 2009. Before Galkynysh came online, Ashgabat was already contracted to increase exports to 40 bcm by 2020, according to Reuters. A new deal signed during Xi's visit will see Turkmenistan deliver 65 billion cubic meters (bcm) annually by 2020.

Turkmenistan's gas reserves are enough to supply gas to China for many years. Galkynysh alone, according to auditor Gaffney, Cline & Associates, is estimated to contain between 13.1 trillion and 21.2 trillion cubic meters of gas.

As Central Asia sends more gas to China, exports to Russia, the region's traditional hegemon, have fallen.

Source: Eurasianet.org