Industry and Energy

Industry and Energy

Nabucco partner secured gas deal with Turkmenistan

20 April 2009 11:08 (UTC +04:00)

Baku. Elmin Ibrahimov â€“ APA-Economics. Germany energy company RWE has signed an agreement with Turkmenistan to develop an offshore gas block, and explore new ways to export Turkmen gas to Europe, bne (www.businessneweurope.eu) reported.

The chairman of the State Agency for the Management and Use of Hydrocarbon Resources of Turkmenistan, Yagshigeldy Kakayev signed a memorandum of cooperation with RWEâ€™s CEO Juergen Grossmann, during Grossmanâ€™s visit to Ashgabat.

The deal provides for long-term cooperation in various areas of the energy sector, according to a statement from RWE.
"We are talking about Block 23 of Turkmenistan’s Caspian shelf," Grossman said. He gave no other details. No public information about this block was immediately available.

"This partnership with Turkmenistan is a big step towards future gas supply contracts with Turkmenistan,â€ Grossman said.

"These will lead to further diversification of Turkmenistanâ€™s export portfolio and improve the security of gas supplies to Germany and Europeâ€ he added.

The news comes shortly after Gazprom reduced its imports of gas from Turkmenistan. Turkmen officials say Gazpromâ€™s sudden decision to cut its imports was the cause of an explosion in the main export pipeline from Turkmenistan.

RWE is a partner in the international consortium hoping to build the EU-backed Nabucco pipeline, which is aimed at bypassing Russia by transporting from Azerbaijan, through Turkey and onward to Europe. Progress on the pipeline has faltered over doubts about its financial viability, but guarantees of Turkmen gas supplies would improve the project’s chances.
n 2007, the Kremlin sought to undercut Nabucco by signing a declaration on the construction of a 1,100-mile (1,700-kilometer) pipeline along the Caspian Sea shore that would run from Turkmenistan through Kazakhstan and into Russia’s network of pipelines to Europe.

Gazprom hopes the pipeline will supplement current gas deliveries from Turkmenistan by around 30 billion cubic meters.

Relations between Turkmenistan and Russia have turned sour in recent days, however, with Turkmenistan accusing Gazprom of causing a pipeline blast on its border with Uzbekistan last week that shut off the Central Asian country’s gas exports.

On Monday, Berdymukhamedov charged the company with committing "technological errors" that triggered the blast and invited independent experts to investigate the incident.