Turkmenistan has for decades talked about making much greater use of its vast gas reserves to both expand export volumes and to diversify its customer base away from near total Chinese dominance. Efforts to export gas to Pakistan and India remain stalled and a plan to export more gas to Türkiye, and onwards to the European Union, have also failed to gain much traction. Turkmenistan is simply on the wrong side of the Caspian Sea and blocked to the south with an 800-kilometer border with Afghanistan.
However, finally its luck may be changing. Several wars in the region, which are blocking or threatening energy export routes, means that major gas importing countries are scrambling for new sources which may offer supply security or simply supply diversification and Turkmenistan is the country with by far the biggest supply potential. Ashgabat is also in the right geography to be a much more important transit route for freight cargoes between the EU and China, partly because of conflict risk and partly due to climate change.
Former President Gurbanguly Berdimuhamedow (now Chairman of the People’s Council) paid a somewhat secretive visit to Florida in February and to Beijing in mid-March. It is assumed that one of the topics of conversation in both locations was about how to get Turkmenistan’s gas flowing to western markets and a bigger volume to China plus making greater use of Turkmenbashi port on the Caspian. There are also suggestions of Turkmenistan allowing the U.S. military greater use of facilities in the country (it also has a 1,150-kilometer border with Iran) in exchange for help with pipeline financing.
In 2009 Turkmenistan and China inaugurated the first of three Central Asian gas pipelines (Line A) to take gas on an almost 2,000-kilometer journey from the former’s Galkynysh gas field (the second largest in the world) to the fast-growing Asian economy. Two additional lines (Lines B and C) followed, taking the annual capacity to 55 billion cubic meters. However, because Russia has been aggressively offering China cheaper gas (LNG and piped gas), the annual offtake from the Central Asian route has been closer to 35 billion cubic meters in recent years. Still, that represents 80 percent of the value of Turkmenistan’s total annual exports and leaves the country vulnerable to unilateral changes in demand or pricing, as happened for several years during and after Covid.
The over four-year conflict in eastern Ukraine has resulted in the EU adopting a schedule to phase out the import of new Russian LNG from April this year and to impose a complete ban on importing all gas from Russia from January 1st next year. Brussels’ assumption was that it would be able to secure enough alternative gas from the world market. The Gulf War destroys that assumption, even if the fighting soon stops and the Strait of Hormuz reopens.
The EU plans to buy more gas from Azerbaijan along the Southern Gas Corridor (SGC), which incorporates the Trans Adriatic Pipeline (TAP) and Trans Anatolian Pipeline (TANAP) – with a target of 20 billion cubic meters by 2027, from 12 billion cubic meters last year. But that extra volume is nowhere near enough for the EU.
The Trans Caspian Pipeline
One option would be to help Turkmenistan build the long-talked about Trans-Caspian Pipeline which has a planned capacity of 30 billion cubic meters. The pipeline was approved by the other four littoral states as part of the 2018 Caspian Sea Agreement, but Turkmenistan has failed to get support, principally from Azerbaijan, for the project. Azerbaijan has been investing heavily in boosting its own gas production and needs almost all of the capacity of the SGC pipeline to Europe. The last thing President Ilham Aliyev wants is to make space for Turkmen gas, or at least not without somebody else paying for a major upgrade to TAP and TANAP. Even if that were possible, the extra pipeline capacity at the chokepoints is probably not much more than 10-15 billion cubic meters.
It is assumed that one of the discussions in Florida recently was about financing the Trans-Caspian pipe to a new landing terminal on Azerbaijan’s coastline and building a new pipeline via the Zangezur Corridor (now known in the U.S as the Trump Route for International Peace and Prosperity, aka TRIPP) to Türkiye and into the gas hub which Ankara wants to build. That would bypass the congested SGC and leave any additional spare capacity for Azerbaijan to fill.
The problem with the Trans-Caspian pipe is that while approval for the project was agreed as part of the 2018 agreement, any other littoral state, including Russia and Iran, could still block it on environmental grounds. So, far from a done deal.
In Beijing, President Xi Jinping made specific reference to the possibility of finally building the fourth Central Asian gas pipeline (Line D). This would take a more southerly route to Southwest China via Uzbekistan and the Kyrgyz Republic and would have a capacity of 30 billion cubic meters. If China were to ramp up the full capacity of the existing pipes and build Line D, then it could secure 85 billion cubic meters of Turkmen gas or over 50 billion cubic meters more than last year.
China National Petroleum Corporation (CNPC) is about to start major expansion work in the Galkynysh gas field and that, when completed, would provide enough additional gas for the proposed Line D. Turkmenistan is in talks with the Abu Dhabi National Oil Company (ADNOC) about other expansion projects in Galkynysh, which would also provide enough additional gas for the Trans-Caspian Pipeline.
The problem with Line D is that the geography is difficult, and the cost of the pipe would be considerably more than other pipelines, for example Russia to China pipes including the equally-long-talked-about Power of Siberia 2 line. Forty-two tunnels would have to be built to get through the mountains in the Kyrgyz Republic and the initial estimated cost to build the pipeline is close to USD 7 billion.
Turkmenistan’s other main hope, to build the 33-billion Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline route never appeared realistic, even despite regular reports of pipeline progress. India said it would buy gas only “at spot” on the border but would never rely on a route via Pakistan as part of energy supply security. The recent escalation in fighting between Pakistan and Afghanistan is probably the final nail in that coffin of hope.
Expanding transport networks across Central Asia
Turkmenistan is also now in a potentially good position regarding the expanding transport networks across Central Asia, especially the so-called Middle Corridor, connecting the EU with China via the Caucasus and Kazakhstan, and the International North South Transport Corridor (INSTC) connecting Iran’s ports (with the UAE and India) to Russia and with the Middle Corridor. China had hoped to build a major new transport route via Afghanistan to Iran’s Gulf Ports. Now it is talking about expanding the route via Turkmenbashi port and linking to Türkiye’s ports via the Zangezur/TRIPP corridor.
The Middle-Corridor is also expected to be forced to move further south from Kazakhstan’s Caspian Sea ports to Turkmenbashi because the sea level in the northern Caspian is shrinking. Some studies suggest that Kazakhstan’s major port of Aktau, a key junction on the Middle Corridor, will be dry within 30 years and will require very extensive and expensive constant dredging to keep a ship channel open. That will add to cargo transit costs and make Turkmenbashi a lot more attractive.
Joining the Green Energy Corridor initiative with the EU
Finally, Turkmenistan is also well positioned to produce much more green electricity (using its gas reserves) and to join the Azerbaijan-led Green Energy Corridor initiative with the EU. This project will see green energy produced in Central Asia and in Azerbaijan transported via a Black Sea cable to Eastern Europe. The plan is to later add a southerly route via the Zangezur/TRIPP route via Türkiye to southern Europe.
If the regional political obstacles can be overcome and financing secured, Turkmenistan could see a boost in total gas exports from circa 37 billion cubic meters last year to potentially 110 billion cubic meters by the turn of the decade and, based on 2025 data, see the value of exports rise from USD 14 billion to circa USD 40 billion, and a lot more when green electricity exports and transport services are added.
Ashgabat would be even more reliant on China but would also have some options in the west. That would bring much greater foreign currency inflows and may finally allow the government to deal with the damaging dual-currency structure and open for new investment in other sectors of the economy.
Turkmenistan and the EU have also been increasingly strengthening ties, elevating cooperation to a strategic level, focusing on transport connectivity, energy, trade, and investment.
After the EU-Turkmenistan Business Forum on March 26, EU officials in Ashgabat said the European Union will continue to work closely with Turkmenistan and international partners to support reforms, enhance connectivity and unlock sustainable investment opportunities in the country and across the wider region.
Turkmenistan has long been known as something of an eccentric hermit-state. The government has been accused of suppressing media and any form of opposition. Its economic and trade data reporting is not so much opaque as politically motivated guesswork. That said, it is today in the right geography and with an abundance of the right resources that Europe and China not only would like but now increasingly need, Ashgabat is boosting strategic partnerships and its geo-strategic energy role. Wars are never good for most people or for the global economy. But, for Turkmenistan, the coincidence of several regional conflicts may finally provide the opportunity for it to convert long-held pipeline dreams into lucrative reality.