My Way: Western Firms Shut Out from development deals in Turkmenistan

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Turkmenistan appears to be implementing an eastern strategy in order to export natural gas to the West.

Ashgabat has traditionally shipped most of its gas to Russia, but a long-lasting pricing dispute has severely strained the two countries’ special energy relationship. [For background see the Eurasia Insight archive].

In early December, Turkmenistan inaugurated an export route to China – a momentous export-diversification move. And on December 30, Ashgabat took the first step toward possibly upping its export volume to Western Europe countries by awarding $9.7 billion in contracts to develop the South Yolotan gas field.

Although clearly intent on diversifying its export options, Turkmenistan remains reluctant to antagonize Russia. That helps explain why none of the contracts handed out on December 30 went to big Western energy conglomerates. Instead, firms from China, South Korea and the United Arab Emirates secured the lucrative development deals. China’s Development Bank Corp. has pledged to help fund development costs. When operating at full capacity, Turkmenistan projects the South Yolotan field to produce 30 billion cubic meters of gas per year.

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