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Turkmenistan told potential investors and gas buyers at an international gas conference today in Ashgabat that the maximum amount of fuel at Southern Yolotan is 16 trillion cubic meters. The figure is 2 trillion cubic meters more than the estimates of Gaffney, Cline and Associates in 2008. According to the Gaffney, the field's gas reserves range from 4 to 14 trillion cubic meters.
The conference in Ashgabat brought together European investors and gas importers who want to understand Turkmenistan's position in gas supply issue to the EU.
Turkmen Vice Prime Minister Baimurad Khojamuhammadov's statements on increasing the gas reserve estimates sounded before a wide audience, most whom were interested in direct talks on Turkmen gas purchases. The Nabucco pipeline project, which is designed to transport gas from the Caspian region and the Middle East to the EU, is the priority Turkmen gas import project.
Nabucco shareholder RWE estimated the country's potential gas exports at 10 billion cubic meters per year by 2015-2016. Turkmenistan is seen as the country that will decide the project's fate. The signing of a gas supply agreement amounting to 10 billion cubic meters per year for 30 years between the EU and Turkmenistan in April is a crucial step in moving forward the project.
The European commissioner for energy's recent statements that the commission will provide the country with a safe and stable environment for energy exports to the EU confirms the country's importance for the organization. The commissioner said an option to buy gas from Turkmenistan via a pipeline across the Caspian Sea and the Caucasus is also important for the EU.
Turkmenistan, in turn, has repeatedly declared its commitment to diversify export destinations. To date, the only option for Turkmen gas to have direct access to European markets is the Trans-Caspian Pipeline, whose construction is now hampered by the unresolved status of the Caspian shelf. The pipeline's planned length is about 300 kilometers, with a route lying on the Caspian seabed between Azerbaijan and Turkmenistan.
Turkmenistan's statement about the gas reserves at Southern Yolotan can be seen as a show of the country's desire to further increase the attractiveness of the country's energy sector for investors and provide an impetus to the development of the Southern Corridor project.
According to BP, in early 2009, the country's proven gas reserves were 7.94 trillion cubic meters, which comprises 4.3 percent of the world's total proven gas reserves. Turkmen oil production was 66.1 billion cubic meters in 2008, which is 0.7 percent more than in 2007, BP reported.
Turkmenistan pursues a provision service contract policy on onshore oil fields to foreign companies. The offshore fields are available for PSA contracts. Khojamuhammadov said the country will continue to adhere to this policy. In 2009, Turkmenistan signed contracts worth $10 billion with CNPC (China), LG International and Hyundai (South Korea), and Petrofac Emirates (UAE) to develop Southern Yolotan.
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