Sat. Sep 23rd, 2023
    Turkmenistan’s Potential Gas Export to Europe Sparks European Interest

    Turkmenistan’s vast gas reserves have attracted significant attention from potential importers, particularly after the country announced its openness to developing a pipeline to transport gas across the Caspian Sea and into Europe. Hungary, in particular, has shown great interest and signed a gas supply agreement with Turkmenistan in August. This agreement, along with agreements between Turkey and Hungary and Azerbaijani gas supply to Hungary, signifies Hungary’s preparation for a future without guaranteed gas supplies from Russia. Currently, Hungary heavily relies on Russian gas imports, which will cease by the end of 2024 due to Ukraine’s unwillingness to renew the existing transit agreement.

    For Turkmenistan, the agreement with Hungary marks a concrete indication that Europe is serious about receiving gas from Turkmenistan’s vast reserves as an alternative to Russian gas. The specific details regarding the amount of gas Hungary will import, the delivery method, and the start of the supply are yet to be disclosed. Currently, the only available route for Turkmen gas is a three-way swap deal between Turkmenistan, Iran, and Azerbaijan, which allows gas to be transported from Turkmenistan to northeastern Iran and then to Azerbaijan. Azerbaijan could then use its existing pipelines to transit the gas to Europe.

    In addition to Europe, Iraq has also expressed interest in importing gas from Turkmenistan, with Iran serving as a potential transit route. Iraq has been importing gas from Iran for electricity generation, but maintaining steady supplies has been challenging due to payment transfer difficulties caused by US sanctions against Iran. An agreement between Iraq and Turkmenistan is expected to be reached later this year, and the transit details are likely to involve a barter arrangement to circumvent the need for monetary transfers through Iran.

    The development of a new pipeline infrastructure across the Caspian Sea and the involvement of key transit nations in the gas supply chain are currently under discussion, further highlighting the potential of Turkmenistan’s gas reserves for Europe and other gas-hungry markets.


    – Eurasianet