China And Turkmenistan Seal Pipeline Deal

By Stewart Douglas

China has today agreed to allow the Turkmenistan State Gas Company to produce and transport natural gas through Chinese territory. 

With depleting oil reserves, and the ever increasing price of crude oil, natural gas is becoming a more serious consideration with demand perpetually increasing throughout Asia and the Western world.

However to date, the only existing pipeline for gas from the region runs through Russia, creating a volatile supply situation.

The planned Chinese pipeline could become the first channel of distribution out of Central Asia that avoids Russia, a significant step in securing the future of world gas supply over the coming years.

Turkmenistan has also opted to remain open to further routes through India and Turkey, as well as a potential under-water connection to Europe.

With competition for Central Asian gas likely to hot up over the coming years, Turkmenistan could open up a number of paths with neighbouring countries for the wider supply of their natural gas output.

With the rapidly growing Chinese economy demanding an increasing energy supply from natural resources, the impetus to consume more natural gas comes with protecting the environment and the economy.

The deal to allow the pipeline and production to run through China was signed on Wednesday, by both China National Petroleum Company and the Turkmenistan national gas authority in China, with China designated to bear the costs of construction.

Turkmenistan president Germanguly Berdymukhammedov signed on behalf of the Turkmen gas authority, to seal the first channel out of the landlocked region without passing through Russia.

The deal has yet to be finalized, and work yet to begin on construction of this landmark pipeline. 

However, it looks as though this has been a deal some years in the making, after a previous supply agreement between both nations apparently never came to fruition.