Oil and Gas Complex: International Cooperation, Modernization, Diversification


The energy policy of Turkmenistan is aimed at the comprehensive development of the fuel and energy complex and its dynamic integration into the international energy system. Large-scale investment projects implemented by our country in this area not only have important economic significance, but also play a significant role in strengthening regional and global energy security.

In a keynote address at the second meeting of the Hulk Maslakhaty in September 2019, the head of state outlined a number of priority tasks for the oil and gas industry in the near future.

This is the diversification of the industry, the construction of modern complexes specializing in oil and gas processing, the accelerated industrial development of new fields, including the Turkmen sector of the Caspian Sea and the Galkynysh field, as well as the expansion of the entire spectrum of digital technologies used in these works, in particular, due to the application of 3D modeling methods.

The head of state also noted the need for active implementation of the programs launched to address international issues, especially to ensure energy security, the formation of a multivariate transport infrastructure.

International cooperation in the energy sector is a priority of the economic strategy of Turkmenistan, which occupies the fourth place in the world in natural gas reserves. The policy implemented in this area is based on the principles of long-term, openness, consideration of national interests and mutual responsibility.

In accordance with interstate agreements, the capacity of the Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline is gradually increasing. In December 2019, it was 10 years since the launch of this world's largest energy highway. Over the past period, about 260 billion cubic meters of natural gas have been exported to China from Central Asia. More than 80 percent of this volume went to the pipeline from the Turkmen fields, primarily those operated by the Türkmengaz State Concern.

The raw material base of the transnational highway is currently being strengthened, the construction of which to this day serves as a good example of long-term, constructive and fruitful interstate cooperation aimed at a specific result.

So, new fields are phased in on the contracted territory of Bagtyyarlyk, the exploration, development and development of which under the terms of the Production Sharing Agreement is carried out by the China National Petroleum and Gas Corporation (CNPC). Seismic surveys conducted on the right bank of the Amu Darya, drilling exploration and production wells made it possible to identify large gas deposits here.

As the Turkmen leader emphasizes, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is of great geopolitical and geo-economic importance. The new energy highway is designed not only to ensure long-term supply of Turkmen gas to the largest countries in South Asia, but also to become a powerful incentive for further socio-economic development of the entire region, strengthening peace, stability and security.

This is especially important for the peaceful revival of Afghanistan, the restoration of its socio-economic infrastructure, and the solution of such pressing issues as the creation of new jobs, which, in turn, will help to improve the living standards of the population. In addition to certain volumes of gas, our southern neighbor will receive substantial commercial benefits for the transit of Turkmen energy resources through its territory.

At present, the Türkmengaz State Concern is building the Turkmen section of TAPI at an accelerated pace. The preliminary design and feasibility study for the gas pipeline project in Afghanistan and Pakistan have been fully completed, and work has been completed to assess the environmental impact of the project.

At the final stage - summing up the results of international tenders to attract contractors for the logistics of the turnkey gas pipeline construction. Construction firms and oil and gas equipment manufacturing companies from Germany, Turkey, Italy, Spain, Greece, as well as from other countries take part in the competitions.

Continuing the theme, we note that in mid-April 2019, gas supplies to the Russian Federation via the previously existing gas pipeline were resumed. And on July 1, a five-year contract for the purchase of natural gas from the Türkmengaz State Concern, entered into with Gazprom, entered into force.

One of the largest investment projects related to increasing the resource base of the industry is the industrial development of the world's largest gas field, Galkynysh, whose reserves, together with the Yashlar and Garakel fields, are estimated at almost 27 trillion cubic meters.

At the moment, the field’s operating fund, with an area of ​​more than 4 thousand square kilometers, has over 40 wells, each of which has an average production rate of two million cubic meters of gas per day.

At the same time, there is a high probability that the field goes beyond the boundaries of the existing area in the north-west and south-east directions. After receiving additional information, the Galkynysh gas reserves estimate may be revised upwards.

In December, President Gurbanguly Berdimuhamedov signed a Decree according to which the Türkmengaz State Concern will conclude a contract with Sumitomo Corporation Europe Ltd. (Great Britain) for the purchase of pipes of various diameters and purposes, as well as metal products and equipment necessary for drilling and construction on Galkynysh 11 more production wells. Their total flow rate will be about 20 million cubic meters of gas per day.

An agreement was concluded with the Japanese company Mitsubishi Corporation for the preliminary technical design of a plant for the production of 10 billion cubic meters of marketable gas per year, which is planned to be built as part of the next stage of development of Galkynysh. Earlier, three gas processing complexes with a total capacity of 30 billion cubic meters of “blue fuel” were commissioned here.

The construction of a gas compressor unit with an annual capacity of 2 billion cubic meters has begun at the Zäkli Derweze gas treatment facilities serving a group of gas condensate fields in Central Karakum. This project, which is being implemented by the Türkmengaz State Concern in conjunction with GP Global Equipment Pte Ltd (Singapore), is planned to be completed in 2022.

In accordance with the instructions of the head of state Gurbanguly Berdimuhamedov, an extensive exploration program has been prepared at the Türkmengeologiýa State Corporation to identify new deposits of oil and gas and other natural resources.

Among the main directions of these works is the strengthening of the raw material base of the eastern region of the country, which serves as the main supplier of “blue fuel” to Turkmenistan’s export energy routes. In this regard, geophysical exploration and drilling of exploratory wells are carried out on the territory of well-known fields where new productive formations can be identified, as well as on nearby promising areas.

Near the Malay field, in 2019 a new field was discovered - Tajibay. The first two wells drilled by specialists of the Türkmengeologiýa State Corporation opened a productive formation at a depth of 2 thousand 400 meters, producing industrial gas inflows.

It is important that hydrocarbon accumulations in this area are located at shallow depths and are readily available for development. At the same time, drilling operations are ongoing here to evaluate the gas content of the reservoirs, which are located below the operational one. A similar set of seismic studies and exploratory drilling is planned around the Naip and Bagadzh fields.

In order to increase the efficiency of seismic research, it is planned to purchase a new 3D field seismic complex and software for processing and integrating information obtained from the results of field work. This complex will allow in the long term to introduce 4D monitoring technology to optimize oil and gas production in the developed oil and gas fields.

Exploration work is also being actively carried out in the west of the country - at the Yuzhny and Vostochny Gamyshlydzha, Ordekli, Altyguyi and other fields. In particular, an industrial gas inflow was received in well No. 1 on the North Nazar-Ekerem square and started work on the calculation of its reserves.

The Türkmennebit state concern is preparing to begin construction of the first exploratory well with a design depth of 6,500 meters on the prospective area of ​​South Uzynada. This structure is located next to the Uzynada field, recently discovered in the Caspian coastal zone.

Recall that four wells with a depth of more than 7 thousand meters were drilled at Uzynada, where industrial inflows of natural gas and gas condensate were obtained. Such wells were first constructed in the history of the oil and gas sector of Turkmenistan and are the deepest to date in Central Asia.

In March 2019, a Memorandum of Understanding was signed between the Türkmennebit State Concern and the ARETI International Group of Companies regarding cooperation in the development of this field.

The new investment project is being implemented jointly with Yug-Neftegaz, a company registered in Singapore. Within its framework, it is planned to build 60 exploration and production wells at the North Goturdepe field, including the adjacent shallow areas of the Caspian.

The actual direction of work carried out in the fuel and energy complex is the introduction of new technologies that contribute to increasing the productivity of production wells in oil and gas fields.

In particular, the contract of the Türkmennebit State Concern with the Russian joint-stock company Tatneft was extended for the provision of services for the overhaul of wells and enhanced oil recovery at the Goturdepe field. Within its framework, an additional set of Turkmen specialists was made for work in the Tatneft branch, specialized equipment was delivered from Russia.

Great prospects are associated with the fields of the Turkmen sector of the Caspian Sea, experts estimate their reserves at 12.1 billion tons of oil and condensate, as well as 6.1 trillion cubic meters of gas.

Today the company Petronas Charigali (Turkmenistan) (Malaysia) operates here, which carries out exploration and production of hydrocarbons on the Block-I contract territory, the total investment is about 11 billion US dollars. Currently, the Makhtumkuli and Diyarbekir fields are producing intensive oil and gas. The immediate plans include intensification of drilling operations in the western part of the Garagol Deniz field.

In turn, Dragon oil (Turkmenistan) Ltd, a subsidiary of Dragon oil (UAE), is developing the Jeytun and Dzhigalybek deposits that are part of the Cheleken contract area. A large amount of work has also been done to modernize and develop the offshore oil and gas infrastructure. If we talk about numbers, then in total more than 6.6 billion US dollars have already been allocated for these purposes.

Currently, Petronas and Dragon oil are negotiating the extension of existing agreements concluded in accordance with the Law of Turkmenistan “On Hydrocarbon Resources”, and have submitted commercial proposals in this regard.

In addition, there are Production Sharing Agreements for a number of offshore units with Buried Hill (Cyprus), RWE and Wintershall (Germany), ARETI (with headquarters in Geneva, Switzerland). Fruitful cooperation has been established with the Italian company Eni (the Nebitdag contractual territory) and the Austrian Mitro International (the Khazar consortium), which have been operating in the Caspian region for many years.

Along with this, purposeful activities are being carried out to diversify the oil and gas industry, and to build large industrial facilities specializing in the processing of hydrocarbon raw materials, including those related to petrochemistry, gas chemical and chemical industries, and the electric power industry.

In this regard, the landmark event was the commissioning of the world's first plant for the production of synthetic gasoline from natural gas in the Akhal velayat. The opening ceremony of the unique gas chemical complex took place in June 2019 with the participation of President Gurbanguly Berdimuhamedov.

The plant was built jointly by the Türkmengaz State Concern and a consortium of Kawasaki Heavy Industries Ltd. (Japan) and Rönesans Endüstri Tesisleri Inşaat Sanaýi ve Ticaret A.Ş. (Turkey). Annually 1 billion 785 million cubic meters of “blue fuel” will be processed here and 600 thousand tons of ECO-93 gasoline meeting the highest environmental standards, as well as 115 thousand tons of liquefied gas, will be produced.

The industrial complex is included in the Guinness Book of Records as “The First-ever Plant for the Production of Gasoline from Natural Gas”, and is also awarded the Innovation Technologies Certificates of the Swiss Federal Institute of Technology and the Ecological Clean Fund of the Environmental Protection Fund (USA). The GTG project (gas to gasoline) is based on the TIGAS technology developed by the Danish company Haldor Topsoe, which, in combination with highly efficient catalysts, makes it possible to produce high-quality gasoline with the lowest energy consumption and minimal environmental impact. This technology received the international award IChemE Global Awards 2019, established by the Institute of Chemical Engineers (UK), in the Oil and Gas nomination. When using fuel grade ECO-93 in the exhaust gases of automobiles, the content of sulfur oxides is reduced by 50 times, nitrogen oxides - by 5 times, carbon monoxide - by 2 times and hydrocarbons - by 20 percent, which can significantly reduce the level of harmful gases into the atmosphere. In addition, the carbon deposits formed in the car engine are reduced, this extends the technical life of their service by 2 times.

Thus, the plant in Akhal is one of the most innovative production facilities in the world. Based on this, it is planned to carry out the construction of a similar complex. The corresponding Memorandum between the Türkmengaz State Concern and the Kawasaki Heavy Industries Ltd. and Sojitz Corporation group of companies was signed as part of President Gurbanguly Berdimuhamedov’s working visit to Japan in October.

In accordance with the Program for the socio-economic development of the country for 2019-2025, work will continue on the creation of high-tech industries based on the latest highly efficient and environmentally friendly technologies and know-how. In the oil and gas sector, it is planned to build and modernize more than 20 large facilities.

In the future, it is planned to build new gas-chemical complexes in each velayat of the Fatherland, including the production of polyethylene and polypropylene, rubber and polystyrene, polyvinyl acetate, methanol, etc. The implementation of plans outlined in this area will help accelerate the pace of industrialization of the country, increase competitiveness and export potential of the national economy.

In April 2019, during the visit of the President of the Republic of Korea, Moon Jae-In, to Turkmenistan, a solid package of documents was signed, including on cooperation in the field of energy. In particular, an agreement was reached between the national oil and gas company NaPeCo and LG International to create a joint venture to market the products of the polymer plant in Kiyanly on world markets.

Recall that this complex was commissioned by the State concern Türkmengaz by LG International Corp and Hyundai Engineering (Republic of Korea) with the participation of TOYO Engineering Corporation (Japan). The production capacities of the enterprise commissioned in 2018 allow it to process 5 billion cubic meters of natural gas per year (of which, after the corresponding processing, 4.5 billion cubic meters is fed back to the gas pipeline) and due to this, produce 386 thousand tons of high density polyethylene, 81 thousand tons of polypropylene of various brands.

In addition, the Ministry of Textile Industry of Turkmenistan and the Korea Institute of Industrial Technology will study the possibility of establishing production of textile synthetic fibers. Thus, a complete chain will be created in the gas industry: from the extraction and processing of raw materials to the production and sale of high value-added products.

A “Conceptual Development Strategy for the Turkmenbashi Oil Refinery Complex and Seydi Oil Refinery” is being developed.

This document will analyze in detail the potential of TKNPZ and SNZ, identify promising areas for their further development, as well as the optimal range of oil products that are in high demand in world markets, the production of which is possible at the plants of the complex.

Currently, the TKNPZ is building a new unit for delayed coking and deasphalting of tar. The main objective of the project, carried out jointly with Westport Trading Europe Limited (USA), is the processing of heavy residues of tar and fuel oil based on the technology of Foster Wheeler.

In addition to total petroleum coke, the plant will produce liquefied natural gas and components for the production of gasoline. Light coke oven gas oil is also the raw material for the diesel hydrotreatment unit, which will produce Euro-5 automotive fuel. And heavy coke oven gas oil will become the raw material for the catalytic cracking unit operating at the plant.

In the future, it is planned to use this equipment for commissioning an additional needle coke production section.

In the coming years, it is planned to build new technological facilities at TKNPZ, which will make it possible to bring the oil refining depth to more than 90 percent, to increase the production of high-quality gasolines, basic technical oils and other petrochemical products.

Proceeding from this, President Gurbanguly Berdimuhamedov approved the project to expand the commodity and raw material park of the Turkmenbashi complex of oil refineries. Within the framework of this project, it is planned to build 19 tanks for storing raw materials and finished products with a total capacity of about 120 thousand cubic meters, including at an oil refinery in the city of Turkmenbashi, at the Kenarsky enterprise for storage and shipment of oil products, as well as at the terminal of the Seydi oil refinery in the city of Kerki .

The solid composition of participants in the industry forums held annually in our country is a clear confirmation of the great interest on the part of business circles of various countries in building up productive cooperation with Turkmenistan, which has enormous energy potential.

At the same time, the desire of the world community to strengthen partnership with our country is determined by the open door policy and constructive initiatives of President Gurbanguly Berdimuhamedov to ensure global energy security.

In May, the X International Gas Congress of Turkmenistan (TGC-2019) was held in the Avaza National Tourist Zone (TGC-2019), which was attended by about 450 delegates from 30 countries. Among them are representatives of more than 100 oil and gas companies, reputable international organizations and financial institutions, domestic and foreign ministries and departments, research centers.

Topics discussed included the development of the global gas market, regional and interregional gas transportation infrastructure, as well as diversification of the gas industry, innovative technologies and projects in the gas processing industry.

On the sidelines of the forum, numerous business meetings were held between foreign businessmen and the leaders of the oil and gas departments and concerns of Turkmenistan, during which specific proposals for establishing mutually beneficial partnerships in various sectors of the domestic gas industry were considered.

Cooperation in the oil and gas sector was given special attention at the First Caspian Economic Forum, held in August 2019 in the Avaza National Tourist Zone.

As the President of Turkmenistan, speaking at his opening, large reserves of hydrocarbon raw materials lying in the bowels of the Caspian Sea and the adjacent territories, when used effectively, are able to give a strong energy impulse for the dynamic and high-quality growth of national economies of both the coastal countries themselves and neighboring states, provide conditions for the creation of new industries, the construction of industrial facilities.

“The energy of the Caspian Sea should become the basis for the dynamic development of the region’s economy,” the President emphasized. A separate session of the KEF was devoted to the energy potential of the Caspian Sea, during which the discussion unfolded regarding the construction project of the Trans-Caspian gas pipeline. In particular, representatives of the European Union and other international organizations expressed their support for this project, while European companies Edison Technologies, MMEC Mannesmann, Air Liquide Global E&C Solutions and the Chinese SINOPEC Engineering Group expressed their readiness to implement it. As noted, the consortium is ready to lay a gas pipeline 300 kilometers long along the bottom of the Caspian Sea, drill the required number of turnkey gas wells, design and build gas treatment plants and compression stations,which will provide the gas pipeline with purified gas, and all relevant infrastructure. Achievements of the domestic fuel and energy complex were presented at the Caspian Exhibition of Innovative Technologies held as part of the KEF. During the review, the State Commodity and Raw Materials Exchange of Turkmenistan held tenders at which transactions were concluded for the purchase of petrochemical products with a total value of 335 million 476 thousand US dollars.

Traditionally, the International Exhibition and Conference “Oil and Gas of Turkmenistan” (OGT) traditionally serves as an effective platform for exchanging experience and promoting international cooperation in the energy sector. In October 2019, the forum was held for the 24th time, gathering prominent scientists and experts, representatives of government agencies and authoritative organizations, leading foreign companies and relevant departments from Europe, Asia and America in Ashgabat.

A wide range of products and services in the field of exploration, production and transportation of hydrocarbons, deep drilling, modernization of existing pipelines and construction of new pipelines, increasing the capacity of oil and gas processing, and increasing the productivity of wells were presented at a specialized exhibition. A special place is given to the formation of coastal infrastructure necessary for the implementation of projects in the Caspian.

Topical issues such as global trends in the development of energy markets, optimization of production in oil and gas fields with the involvement of foreign investors, including for the development of offshore blocks of the Turkmen sector of the Caspian Sea, were put on the agenda of the conference.

Among the main topics of the plenary sessions are the energy diplomacy of Turkmenistan, transnational pipeline projects, the priorities of the gas chemical and oil refining industries, and the deep processing of hydrocarbons.

We also note that in February in the capital of India - the city of New Delhi - the International Oil and Gas Conference and the Petrotech-2019 exhibition were held. The state concern Türkmengaz took part in the forum in order to familiarize large world companies with the prospects for the development of the oil and gas industry of Turkmenistan, implemented in the country by major investment projects, including the construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

At an expanded meeting of the Cabinet of Ministers on February 7, dedicated to the results of 2019 and tasks for 2020, President Gurbanguly Berdimuhamedov noted that the development and modernization of the oil and gas complex, the formation of innovative industries for the processing of hydrocarbon resources, diversification of its export potential, as well as the creation of a multi-vector pipeline system energy supply is one of the key areas of development of the country's economy.

Therefore, the head of state emphasized, the activity on modernization of the fuel and energy complex should continue. It is necessary to implement projects for the search, production, processing of hydrocarbons and the development of new deposits. It is necessary to work to ensure energy security through diversification of export supplies of Turkmen energy through new pipelines.

The construction of a strategically important project, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline, should also be actively pursued. It is necessary to continue the work on the construction of new gas processing plants, increasing production and export of liquefied natural gas, the head of state said.

In general, the implementation of the country's socio-economic development strategy for the coming years and its most important component - the oil and gas industry - will significantly strengthen the country's economic power.
State News Agency of Turkmenistan