Identifier
Created
Classification
Origin
09ASHGABAT1071
2009-08-26 08:50:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN: CNPC ON SCHEDULE TO SHIP GAS TO CHINA
how-toVZCZCXRO1261 PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG DE RUEHAH #1071/01 2380850 ZNR UUUUU ZZH P 260850Z AUG 09 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC 3349 INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUCNCIS/CIS COLLECTIVE RUCNMEM/EU MEMBER STATES COLLECTIVE RUEHAK/AMEMBASSY ANKARA 5583 RUEHBJ/AMEMBASSY BEIJING 3302 RUEHKO/AMEMBASSY TOKYO 3166 RUEHIT/AMCONSUL ISTANBUL 3826 RUCNDT/USMISSION USUN NEW YORK 1105 RHMCSUU/CDR USCENTCOM MACDILL AFB FL RUEHVEN/USMISSION USOSCE 3834 RUEAIIA/CIA WASHDC RHEFDIA/DIA WASHDC RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RUEKJCS/JOINT STAFF WASHDC
UNCLAS SECTION 01 OF 02 ASHGABAT 001071
SENSITIVE
SIPDIS
STATE FOR SCA/CEN; EEB; NEA/IR
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: N/A
TAGS: EPET PGOV EINV TX
SUBJECT: TURKMENISTAN: CNPC ON SCHEDULE TO SHIP GAS TO CHINA
REF: ASHGABAT 815
UNCLAS SECTION 01 OF 02 ASHGABAT 001071
SENSITIVE
SIPDIS
STATE FOR SCA/CEN; EEB; NEA/IR
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: N/A
TAGS: EPET PGOV EINV TX
SUBJECT: TURKMENISTAN: CNPC ON SCHEDULE TO SHIP GAS TO CHINA
REF: ASHGABAT 815
1. (U) Sensitive But unclassified. Not for public Internet.
2. (SBU) SUMMARY: Chinese National Petroleum Corporation (CNPC)
recently announced that its Amu Darya project had been connected to
the Uzbek section of the Central Asia - China pipeline. CNPC added
that the inter-border connection will contribute to ensuring
scheduled gas supplies to China by 2010. The announcement shows
that foreign energy companies can and are doing business in
Turkmenistan, especially if they are willing to build pipelines.
END SUMMARY.
3. (SBU) The Amu Darya project or Bagtyarlyk contractual territory,
as it is referred to by the Turkmen Government, is a group of fields
being developed by CNPC under a production sharing agreement
(reftel). According to its production sharing agreement, CNPC is
developing gas fields located in the contractual territory that
includes the large Samandepe and Altyn Asyr fields, constructing two
gas processing plants, and building a 78-kilometer pipeline to
transport natural gas from the Samandepe and Altyn Asyr fields to
the Uzbek section of the Central Asia - China gas pipeline. CNPC
plans to complete construction of a gas processing plant with a
capacity of five bcm of gas per year located at the Samandepe gas
field by the end of 2009. So far, 84 percent of the work has been
completed. The company plans to finish a second gas processing
plant with a capacity of eight bcm of gas per year by the end of
2010. The Amu Darya project will deliver 13 bcm of gas annually to
the Central Asia - China pipeline when all the gas production and
transportation facilities come on stream.
4. (SBU) ATG, a joint venture between CNPC and Uzbekneftegaz, began
the Uzbek section in the middle of 2008, not far from the Uzbek city
of Bukhara. Construction was begun out on two portions
simultaneously. The first portion stretches toward Kazakhstan and
is not completed, and the second portion, which was recently
connected to the Amu Darya project, stretches toward Turkmenistan.
5. (SBU) Separately, gas produced by the Turkmengaz State Concern
and bound for China will be transported to the Uzbek border through
a Turkmen section of the Central Asia - China pipeline. This leg
will be 188 kilometers long and will utilize 56-inch pipes, which
makes it capable of carrying more than 30 bcm annually.
Stroytransgas, a Russian company hired by Turkmengaz to construct
the Turkmen section, has completed welding on a 76-kilometer portion
of the Turkmen section. Stroytransgaz still has much work to do,
including the pipeline section crossing the Amu Darya River, which
is the most complicated part of the Turkmen section and will be laid
beneath the river bed, according to a Ministry of Oil and Gas
official. The construction of another technically sophisticated
facility -- a compressor station to be built by ENEX (Belgium) -- is
still under way. There are plans to transport 27 bcm of gas
annually through the Turkmen section.
6. (SBU) Supplies to China are planned to start in December 2009
with volumes not exceeding 4-5 bcm of gas over the first year. It
appears the first 4-5 bcm of gas will come from the CNPC-operated
portion of the Samandepe gas field, through the CNPC-built
78-kilometer pipeline running to the Uzbek border. As a result,
there will be no need for Turkmengaz-produced gas originating from
the Turkmen section of the pipeline until the end of 2010.
Therefore, the Turkmen section can be completed in the beginning or
middle of 2010 without throwing the project off schedule. The same
is true for the CNPC-produced gas that will come from the Altyn Asyr
gas field at a later stage.
7. (SBU) COMMENT: Given the challenges inherent in carrying out
the Amu Darya project, CNPC's on-schedule progress is impressive.
Despite wide-spread initial skepticism regarding the ambitious
ASHGABAT 00001071 002 OF 002
implementation dates, gas shipments are very likely to start in
December 2009 or January 2010. CNPC's ability to engage
Turkmenistan on this project benefited from the Chinese Government's
political backing together with the Chinese willingness to build the
pipeline to China, thereby conforming to the Turkmen policy of
selling its gas at its borders. Other foreign companies interested
in onshore gas production in Turkmenistan might improve their
chances if they could similarly help the Turkmen not only produce
more gas, but also facilitate its transport to markets. END
COMMENT.
MILES
SENSITIVE
SIPDIS
STATE FOR SCA/CEN; EEB; NEA/IR
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: N/A
TAGS: EPET PGOV EINV TX
SUBJECT: TURKMENISTAN: CNPC ON SCHEDULE TO SHIP GAS TO CHINA
REF: ASHGABAT 815
1. (U) Sensitive But unclassified. Not for public Internet.
2. (SBU) SUMMARY: Chinese National Petroleum Corporation (CNPC)
recently announced that its Amu Darya project had been connected to
the Uzbek section of the Central Asia - China pipeline. CNPC added
that the inter-border connection will contribute to ensuring
scheduled gas supplies to China by 2010. The announcement shows
that foreign energy companies can and are doing business in
Turkmenistan, especially if they are willing to build pipelines.
END SUMMARY.
3. (SBU) The Amu Darya project or Bagtyarlyk contractual territory,
as it is referred to by the Turkmen Government, is a group of fields
being developed by CNPC under a production sharing agreement
(reftel). According to its production sharing agreement, CNPC is
developing gas fields located in the contractual territory that
includes the large Samandepe and Altyn Asyr fields, constructing two
gas processing plants, and building a 78-kilometer pipeline to
transport natural gas from the Samandepe and Altyn Asyr fields to
the Uzbek section of the Central Asia - China gas pipeline. CNPC
plans to complete construction of a gas processing plant with a
capacity of five bcm of gas per year located at the Samandepe gas
field by the end of 2009. So far, 84 percent of the work has been
completed. The company plans to finish a second gas processing
plant with a capacity of eight bcm of gas per year by the end of
2010. The Amu Darya project will deliver 13 bcm of gas annually to
the Central Asia - China pipeline when all the gas production and
transportation facilities come on stream.
4. (SBU) ATG, a joint venture between CNPC and Uzbekneftegaz, began
the Uzbek section in the middle of 2008, not far from the Uzbek city
of Bukhara. Construction was begun out on two portions
simultaneously. The first portion stretches toward Kazakhstan and
is not completed, and the second portion, which was recently
connected to the Amu Darya project, stretches toward Turkmenistan.
5. (SBU) Separately, gas produced by the Turkmengaz State Concern
and bound for China will be transported to the Uzbek border through
a Turkmen section of the Central Asia - China pipeline. This leg
will be 188 kilometers long and will utilize 56-inch pipes, which
makes it capable of carrying more than 30 bcm annually.
Stroytransgas, a Russian company hired by Turkmengaz to construct
the Turkmen section, has completed welding on a 76-kilometer portion
of the Turkmen section. Stroytransgaz still has much work to do,
including the pipeline section crossing the Amu Darya River, which
is the most complicated part of the Turkmen section and will be laid
beneath the river bed, according to a Ministry of Oil and Gas
official. The construction of another technically sophisticated
facility -- a compressor station to be built by ENEX (Belgium) -- is
still under way. There are plans to transport 27 bcm of gas
annually through the Turkmen section.
6. (SBU) Supplies to China are planned to start in December 2009
with volumes not exceeding 4-5 bcm of gas over the first year. It
appears the first 4-5 bcm of gas will come from the CNPC-operated
portion of the Samandepe gas field, through the CNPC-built
78-kilometer pipeline running to the Uzbek border. As a result,
there will be no need for Turkmengaz-produced gas originating from
the Turkmen section of the pipeline until the end of 2010.
Therefore, the Turkmen section can be completed in the beginning or
middle of 2010 without throwing the project off schedule. The same
is true for the CNPC-produced gas that will come from the Altyn Asyr
gas field at a later stage.
7. (SBU) COMMENT: Given the challenges inherent in carrying out
the Amu Darya project, CNPC's on-schedule progress is impressive.
Despite wide-spread initial skepticism regarding the ambitious
ASHGABAT 00001071 002 OF 002
implementation dates, gas shipments are very likely to start in
December 2009 or January 2010. CNPC's ability to engage
Turkmenistan on this project benefited from the Chinese Government's
political backing together with the Chinese willingness to build the
pipeline to China, thereby conforming to the Turkmen policy of
selling its gas at its borders. Other foreign companies interested
in onshore gas production in Turkmenistan might improve their
chances if they could similarly help the Turkmen not only produce
more gas, but also facilitate its transport to markets. END
COMMENT.
MILES