Oil and Gas Industry of Turkmenistan 2012

The study aims to provide a detailed analysis of Turkmenistan’s oil and gas sector, including an overview of the sector’s governance structure, major oil and gas producers, production projects involving foreign companies, oil and gas pipeline network, and Turkmen gas production and exports looking out to 2020.

RPI has kept track of the Turkmen petroleum industry for over 20 years, providing a unique platform for our specialists to develop in-depth analyses of both potential and evolutionary risks associated with the country’s production projects.

This study presents detailed data on oil and gas production, exports, and refining and processing activities. It provides a description of the resource base, while closely focusing on taxes and regulations applicable to he petroleum sector, including producer licensing as well as the domestic investment climate and potential risks. The report also describes principal oil and gas export routes and their potential transformation in the future. It analyses anticipated changes in the demand for Turkmen oil and gas across major petroleum markets.

The key sections of the report provide insights on the following:
• The petroleum industry’s governance structure, regulatory authorities and their powers. The licensing procedure, taxes and work codes. Country-specific regulatory features regarding the petroleum industry that potential investors must know.
• The current status of Turkmenistan’s oil sector: oil reserves and potential discoveries, and historical oil production, refining and export data from 2001 through 2011. Key players and an overview of their production projects. Oil sector infrastructure and crude and petroleum product export routes.
• The current status of Turkmenistan’s gas sector: the asset base and potential reserve gains, and historical gas production, processing and export data from 2001 through 2011. Market players and an overview of production projects. Turkmenistan’s gas export infrastructure and export routes. Prospects of export route diversification.
• Forecasts of Turkmenistan‘s petroleum sector growth by 2020 based on several scenarios: outlook for oil and gas production and exports as a function of specific domestic and international conditions; and sale markets and demand for Turkmen hydrocarbons over the forecast horizon.

This product could be an important strategic decision-making tool for companies specializing in production of hydrocarbons and provision of oilfield and gas field services, and considering Turkmenistan in terms of their business growth opportunities. The report helps evaluate opportunities and prospects for involvement in oil and gas production projects in Turkmenistan and understand associated risks and risk mitigation approaches and strategies.
Also, the information provided in the report gives a good idea of Turkmenistan’s petroleum industry as a whole to those interested in the petroleum sector of the Caspian region and the Commonwealth of Independent States (CIS).
The forecasts and assumptions about the future evolution of the Turkmen petroleum sector, including projections of production, exports and domestic consumption of oil and gas contained in the study are based on a thorough analysis of information obtained from reliable sources. This allows us to predict growth prospects, opportunities, risks and threats for both the sector as a whole and its individual players.

Introduction: Turkmenistan’s Oil and Gas Industry

1 Management of the Oil and Gas Industry

1.1.1 State Agency for Hydrocarbon Resources Management and Use under the President of
Turkmenistan

1.1.2 The Government

1.1.3 State Concerns and Corporations

1.2 Licensing of Activities

1.3 Agreements

1.4 Rules for Conducting Oil Operations

1.5 Pipeline Transport

1.6 Taxes and Other Payments

2 Turkmenistan’s Oil Industry

2.1 Oil Reserves Base

2.2 Oil Production

2.3 Industry Structure: Producers

2.4 Oil Refining

2.5 Oil Transportation Infrastructure

2.5.1 Pipeline System

2.5.2 Sea Terminals

2.5.3 Tanker fleet

2.5.4 Railway Transportation

2.6 Exports of Oil and Oil Products

2.6.1 Oil Exports

2.6.2 Oil export routes

2.6.3 Exports of Oil Products

3 Turkmenistan’s Gas Industry

3.1 Brief History

3.2 Natural Gas Reserves, Development Potential

3.3 Territorial Distribution of Resources/ Gas Reserves

3.4 Gas Industry Structure: Key Players and Projects

3.4.1 Turkmengas

3.4.2 Turkmenneft

3.4.3 Projects with Foreign Operators

3.5 Gas Processing

3.6 Gas Transportation Infrastructure

3.7 Export pipelines

3.7.1 CAC-1, 2 and 4

3.7.2 CAC-3 (Ekerem-Beineu)

3.7.3 Turkmenistan-China Gas Pipeline

3.7.4 Korpedzhe–Kurt-Kui

3.7.5 Dovletobad-Serakhs-Khangeran

3.8 Program for Development of Transportation Infrastructure

3.8.1 Existing Infrastructure

3.8.2 New Gas Transportation Routes

3.8.3 Export Directions: Potential Capacities

4 Projections of oil and gas production and export from Turkmenistan until 2020

4.1 Projections of the production and export of oil and gas-condensate

4.1.1 Production

4.1.2 Export

4.2 Projections of gas production and export

4.2.1 Gas demand in major markets

4.2.2 Methodology

4.2.3 High Scenario

4.2.4 Moderate Scenario

4.2.5 Low Scenario

Chart 2-1. Oil production in Turkmenistan in 2001-2011, thousand tons

Chart 2-2. Oil production at onshore and offshore fields in Turkmenistan, 2011, %

Chart 2-3. Operators of Turkmenistan’s oil/ oil and gas projects

Chart 2-4. Oil production in Turkmenistan by operators, thousand tons

Chart 2-5. Oil production in Turkmenistan by operators on the sea shelf, thousand tons

Chart 2-6. Oil production by Turkmenneft’s production units in 2001-2011, ‘000 tons

Chart 2-7. Oil production at the Khazar contract territory, ’000 tons per year

Chart 2-8. Oil production at the Nebitdag PSA, ‘000 tons per year

Chart 2-9. Oil production in the Cheleken contract territory, ‘000 tons per year

Chart 2-10. Production drilling in the Cheleken contract territory, wells

Chart 2-11. Liquids production at the Block-1 contract territory, ‘000 tons per year

Chart 2-12. Primary oil refining in Turkmenistan, mln. tons per annum

Chart 2-13. Oil Exports from Turkmenistan, million tons

Chart 2-14. Oil products exports from Turkmenistan, ‘000 tons

Chart 3-1. Gas production in Turkmenistan from 1992 to 1999, bcm

Chart 3-2.Gas production in Turkmenistan from 2000 to 2011, bcm

Chart 3-3. Turkmenistan’s gas exports from 2000 to 2011, bcm

Chart 3-4. Onshore and offshore gas distribution

Chart 3-5. Gas production by state concerns, bcm

Chart 3-6. LPG production at gas processing facilities, ‘000 tons per year

Chart 3-7. Gas supplies from Turkmenistan via CAC in 2004-2011, bcm

Chart 4-1. Projections of liquid hydrocarbon production in Turkmenistan until 2020, mln. tons per
annum

Chart 4-2. The balance of production, domestic consumption and export of liquid hydrocarbons in
Turkmenistan in 2012-2020, mln. tons per annum

Chart 4-3. Dynamics of Energy Consumption (mln tons of oil equivalent) in 1990-2010

Chart 4-4. Dynamics of Energy Consumption (Mt o.e.) in the key APR countries in 1965-2010.
Chart 4-5. Dynamics of Used Sources of Energy in China in 1957-2010,%

Chart 4-6. The dynamics of gas consumption by India and China, 2005-2011, billion cubic meters
Chart 4-7. Outlook for gas production in Turkmenistan to 2020, bcm

Chart 4-8. Projections of gas exports from Turkmenistan in 2011-2020, billion cubic meters per
annum

Chart 4-9.Outlook for gas production in Turkmenistan to 2020, Moderate scenario, bcm

Chart 4-10. Outlook for gas exports from Turkmenistan in 2011–2020, Moderate scenario, bcm
Chart 4-11. Outlook for gas production in Turkmenistan to 2020, Low scenario, bcm

Chart 4-12. Outlook for gas exports from Turkmenistan in 2011–2020, Low scenario, bcm

Table 1-1. Comparison of reserves and production of liquid hydrocarbons and natural gas in
Turkmenistan, Azerbaijan, Kazakhstan, Russia and Uzbekistan

Table 1-2. Key provisions of development program for Turkmenistan’s oil and gas industry
through 2030

Table 1-3. Milestones in the development of Turkmenistan’s oil and gas industry

Table 1-4. Taxation of Oil and Gas Industry in Turkmenistan

Table 2-1. Recoverable oil and condensate reserves in the Cheleken contract territory

Table 2-2. Primary refining and production of main petroleum products in Turkmenistan, ’000
tons

Таble 2-3. Turkmenistan’s Oil Pipelines: Key Parameters

Table 2-4. State-owned tanker fleet of Turkmenistan, 2011

Table 2-5. Export of oil and condensate from Turkmenistan in 2011 by route, mln. tons

Table 2-6. Oil products exports from Turkmenistan, ‘000 tons

Table 3-1. Initial reserves of Turkmenistan’s key fields put into production during the Soviet
period

Table 3-2. Gas reserves of major onshore fields in Turkmenistan,bcm, 2011

Table 3-3. Expected gas production volumes of foreign operators, bcm

Table 3-4. Key characteristics of Turkmenistan’s export gas pipelines

Map 2-1. Onshore projects whith foreign participation in Turkmenistan

Map 2-2. Block-1 contract territory

Map 2-3. Licensing blocks in Turkmenistan’s sector of the Caspian Sea

Map 2-4. Turkmenistan’s oil pipeline system

Map 3-1. Gas transportation infrastructure from fields in Eastern Turkmenistan

Map 3-2. Geological profile of South Yolotan–Osman fields

Map 3-3. South Yolotan-Osman fields

Map 3-4. Zeagli-Darvaza group fields

Map 3-5. Bagtyiarlyk contract territory

Map 3-6. PSA projects on the Turkmen shelf

Map 3-7. Turkmenistan-China gas pipeline

Map 3-8. Routes of operating gas pipelines

Map 3-9. Bypass pipelines near Khiva

Map 3-10. Pre-Caspian gas pipeline route

Map 3-11. TAPI gas pipeline

Map 3-12. Trans-Caspian gas pipeline