China launches landmark Central Asia gas pipeline
SAMANDEPE GAS FIELD, Turkmenistan - SAMANDEPE GAS FIELD, Turkmenistan (AP) — A landmark pipeline from Central Asia to China began pumping natural gas Monday, marking Beijing's latest coup in its search for new sources of energy to fuel its burgeoning economy.
The new pipeline is Central Asia's first major gas export route that completely bypasses Russia, and will play a key role in getting former Soviet republics in the region out of Moscow's exclusive economic sphere of influence.
Completed in just over two years, the first stage of the Turkmenistan-China pipeline has been wrapped up before work on rival Russian and Western projects to tap into Central Asia's gas riches have even started.
The route stretches around 1,800 kilometers (1,120 miles) from Turkmenistan through Uzbekistan up to Kazakhstan's border with China and then extends more than 4,500 kilometers (2,800 miles) into China itself.
Turkmen gas deliveries to China through the pipeline are expected to hit around 6 billion cubic meters next year, and those supplies will increase incrementally every year until they reach 40 billion cubic meters in 2015.
The pipeline — which has been built by more than 8,000 workers over the past 27 months — is China's latest success in a vigorous campaign to seize as many energy assets as possible across Central Asia.
"China gives the highest priority to cooperation between our neighbors and this pipeline is witness to the uninterrupted cooperation that continues to flourish between our nations," Chinese President Hu Jintao said Monday.
This year alone, China has pledged multibillion dollar loans to both Turkmenistan and Kazakhstan as part of its bid to secure energy assets and drilling rights in the two countries.
At a midday ceremony in a remote field in northeastern Turkmenistan, the leaders of China, Kazakhstan, Turkmenistan and Uzbekistan donned gloves and together rotated a pipeline spigot to raucous applause and cheering, sending the first consignment.
"The pipeline passing through our countries will revive the ancient Silk Road, once a conduit for the intensive exchange of goods between Asia and Europe," Turkmen President Gurbanguli Berdymukhamedov said in a speech before the opening.
Looking ahead, China has already trained its sights on the gargantuan South Yolotan natural gas field close to the Afghan border. An independent audit by a British company last year said the field may be one of the five largest in the world.
The start of gas deliveries from Turkmenistan to China comes as the former Soviet nation remains mired in a dispute with Russia. Until recently, Turkmenistan was selling 50 billion cubic meters of gas annually to Russia. However, supplies have been suspended since a pipeline blast in April that Turkmenistan blamed on Russia's Gazprom state-controlled gas monopoly. Gazprom denies responsibility.
The pipeline has been fixed, but deliveries to Russia have remained suspended amid arguments about prices as the demand for gas among Russia's European customers has decreased.
Analysts, however, note that Russia may come to regret its decision to economize in the near-term.
"The danger for Russia is that, as China increases its financial commitment to the region and Moscow remains embroiled in disputes, such as that between Gazprom and Turkmenistan, its once-dominant position may eventually be even more fully displaced by China," Chris Weafer, chief strategist at Moscow-based investment bank UralSib, said in a note to investors.
If Gazprom reaches for Turkmenistan in the future to help satisfy a rising demand in Europe, there is a threat that Turkmen gas would have already been sold to China, Weafer warned.
European Union is pinning its hopes of claiming a share in Central Asia's gas on the planned $11.7 billion Nabucco pipeline — also supported by the United States — which would run 3,300 kilometers from to Turkey through Bulgaria, Romania, Hungary and end in Austria, circumventing Russia.
Turkmenistan has nominally committed to providing gas for that route, but little concrete progress has been made.
Likewise, a Moscow-backed natural gas pipeline project along the Caspian Sea that could potentially double the volume of Russia's gas purchases from Central Asia still has not got off the ground.
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Peter Leonard contributed to this report from Almaty, Kazakhstan. Associated Press Writer Nataliya Vasilyeva in Moscow also contributed to this report.
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