Energy Groups Poised to Sign Historic Turkmenistan Gas Supply Deal

A consortium of European energy companies is poised to sign a historic deal with Turkmenistan this month that could bring gas from the resource-rich nation to Europe, bypassing Russia for the first time.

The consortium aims to build a fleet of at least four tankers to ship 3bn-4bn cubic metres of compressed natural gas (CNG) across the Caspian Sea to pipelines in Azerbaijan.

Koen Minne, a Belgian businessman and Turkmenistan's honorary consul to the EU, who is spearheading the scheme, said a consortium of two European energy companies and one financial institution, were pushing to strike a gas supply deal with Turkmenistan by the end of November, with the first gas potentially entering Europe by 2014.

Speaking in an interview with EUobserver, in October, Mr. Minne said that Enex says his engineering company Enex and a consortium of unnamed EU energy companies was getting ready to pitch its final offer to Ashgabat in November.

"Our timeline is to get an agreement in principle during the month of November," he said. "The feasibility study was completed in the middle of September, and we've come to our conclusions on the commercial part."

Minne has said said that if his deal goes through, it isn't likely Turkmenistan would designate its gas for Russia's South Stream project or Europe's Nabucco project, representing a potential setback for the rival pipeline projects.

“It is of course not the intention from the Turkmen side to have Turkmen gas competing with other Turkmen gas ... I don't believe Turkmenistan would sign a policy to feed South Stream or Nabucco," Mr. Minne said.

Minne reportedly speaks regularly to Turkmenistan's deputy Prime Minister Yagshigeldy Kakayev and foreign minister Rashid Meredov. This year alone he claims to have had seven face-to-face meetings with President Gurbanguly Berdymukhammedov and that company has in recent years brokered €430 million of foreign energy investments in the country.

The consortium aims to build a fleet of at least four tankers to ship 3bn-4bn cubic metres of compressed natural gas (CNG) across the Caspian Sea to pipelines in Azerbaijan, from where it would be shipped to Turkey.

Last month, Paolo Scaroni, chief executive of ENI, the Italian oil group, confirmed his involvement.

The European Union has long sought direct access to Turkmenistan's gas reserves to cut dependence on Russia. Turkmenistan's reserves are the fourth largest in the world.

The favoured EU option, a pipeline under the Caspian Sea that could carry up to 10 times as much gas as the CNG scheme, has failed to make progress, partly as a result of the continuing failure of the five Caspian Sea countries to agree on their border, which makes it easy for Russia to block a deal.

Source: The Telegraph

Source: The Telegraph