Turkmenistan, China to sign gas supply deal
Updated: 2005-11-24 10:25
ASHGABAT, Turkmenistan - Central Asia's Turkmenistan will sign a major
agreement next year to sell natural gas to China and jointly develop Turkmen gas
fields, President Saparmurat Niyazov said Wednesday.
China is increasingly looking abroad to secure reliable oil and gas supplies
for its booming economy. Turkmenistan, a largely desert nation, has huge natural
gas reserves and is the second-largest gas producer in the former Soviet Union
Niyazov said the deal, expected to be signed during his visit to China early
next year, would involve building a gas pipeline to China from eastern
Turkmenistan, where the fields planned for joint extraction are located.
The pipeline will be able to carry 30 billion cubic meters (1 trillion cubic
feet) of natural gas a year, Niyazov told a meeting of transport officials from
former Soviet republics in the capital Ashgabat.
The financial terms of the agreement were not disclosed.
In July, Turkmenistan and China signed an agreement on oil and gas
cooperation and China extended a $24 million low-interest loan to Turkmenistan
for the development of its oil and gas industry.
Wednesday's announcement comes days after Niyazov warned Russia and Ukraine
that Turkmenistan can do without their markets if they do not agree to pay more
for gas supplies. The country, citing increased production costs and higher
costs of gas extraction equipment, is seeking to boost its prices for natural
gas exports by about 35 percent.
Ukraine relies on Turkmenistan for about 45 percent of its natural gas needs,
and was planning to buy about 39 billion cubic meters in 2006. Russia was
expected to buy about 7 billion cubic meters and Iran 8