Innovations and international cooperation - the basis for diversification of the fuel and energy complex
Innovations and international cooperation - the basis for diversification of the fuel and energy complex
Published 13.10.2022

The fuel and energy complex is the basic sector of the national economy, which plays a significant role in the strategy implemented by President Serdar Berdimuhamedov to industrialize the country on an innovative basis, digitally transform the national economic complex, solve issues in the field of import substitution, and expand the export opportunities of the Motherland. The energy policy of Turkmenistan is aimed at diversifying the fuel and energy complex, strengthening its position in the world market, and implementing new infrastructure projects.

In this context, the head of state focuses on the importance of actively introducing advanced technologies into the industry, strengthening effective cooperation with foreign partners, emphasizing the demand for high-quality environmentally friendly products.

Our country has the largest oil and gas fields, in connection with which all conditions are created for the further modernization of the fuel and energy complex, focused on attracting the best best practices, building up the potential of the mining and processing sectors, creating a diversified pipeline infrastructure, creating innovative industries that produce competitive products that are in demand in the domestic and foreign markets.

In accordance with the Decree of President Serdar Berdimuhamedov on providing financial support to the state concerns Türkmennebit and Türkmengaz, the State Corporation Türkmengeologiýa, appropriate measures are being taken to finance the production of additional oil volumes in the coming two years. According to the Work Plan to increase the volumes of natural gas and oil through the exploration and development of oil and gas deposits in the coming years, drilling of development and appraisal wells is being carried out at a number of fields, gas pipelines are being laid, and measures are being taken to operate the Bagaja gas processing plant at full capacity.

President Serdar Berdimuhamedov also emphasizes the importance of developing the fuel and energy sector through diversification, attracting investments, building up productive interaction with large specialized companies that are interested in participating in industry projects implemented in the country, as well as the need to continue comprehensive work in this direction.

Turkmenistan, where a favorable investment climate and all conditions for successful business have been created, strives for long-term, mutually beneficial cooperation in the oil and gas sector. To date, our country has established productive contacts with dozens of states, leading foreign companies with advanced technologies, as well as with financial structures and international organizations. Along with the economic efficiency of joint projects, their main criteria are social significance and environmental safety.

A good example of a fruitful interstate partnership in the fuel and energy sector is the interaction between Turkmenistan and China, based on the principles of equality and long-term, meeting the national interests and development priorities of the two friendly peoples.

An important step in expanding fruitful cooperation was the participation of Chinese companies in the industrial development of hydrocarbon deposits in the Bagtyýarlyk contract area and the development of one of the world's largest gas fields, Galkynyş, the discovery of which significantly strengthened our country's status as a leading energy power. The result of such long-term cooperation is the implemented joint project for the construction of a gas pipeline, through which the Turkmen “blue fuel” is now supplied to China.

This grandiose project of the 21st century, based on a balance of interests of all participants - producers, transit countries, and consumers, can also rightly be called a real contribution to strengthening regional and global energy security, which is an integral factor in overall sustainable development.

Today, agreements have been reached at the highest level regarding the development of the second stage of the Galkynyş field and the laying of the fourth branch (D) of the transnational gas pipeline. After its commissioning, the export of Turkmen "blue fuel" to China will increase to 65 billion cubic meters per year.

In terms of proven reserves of natural gas, Turkmenistan occupies one of the leading places in the world and is one of its main suppliers in the Central Asian region. The favorable geopolitical position of our country and the richest deposits of hydrocarbons open up broad prospects for increasing their exports in various directions, building up mutually beneficial cooperation with all interested foreign partners. 

In this context, the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is of great geo-economic importance. This energy highway is designed not only to ensure long-term supplies of Turkmen gas to the largest states of South Asia, but also to become a powerful incentive for further socio-economic development of the entire region, strengthening peace, stability and security here. The implementation of the TAPI project is especially important for Afghanistan, its peaceful reconstruction, and the solution of such pressing issues as the creation of new jobs, which, in turn, will help improve the living standards of the population.

A significant role in the development of the domestic oil and gas complex, attracting foreign investment, and developing hydrocarbon resources was played by the successful work on the basis of Production Sharing Agreements of such world-famous companies as Dragon Oil (UAE), Petronas (Malaysia), Eni (Italy)  and others in the Turkmen sector and the coastal zone of the Caspian Sea. On the basis of the signed Memorandum of Understanding between the Government of Turkmenistan and the Government of the Republic of Azerbaijan, the development and development of hydrocarbon resources of the Dostluk field in the Caspian Sea is being carried out.

Cooperation is actively developing with the Public Joint Stock Company Tatneft (Republic of Tatarstan, Russian Federation), which has proven to be a reliable partner, with which an additional agreement was concluded for the provision of services for well workover and enhanced oil recovery at the Goturdepe field to maintain the level of oil production and gas in our country through the use of efficient technologies.

 It should also be noted the productive joint activities of domestic and foreign sectoral departments, as a result of which a number of documents were signed. Among them: Memorandum of Understanding on the production of ammonia and methanol through the monetization of natural gas between the State Concern “Turkmengaz” and the company “Haldor Topsoe A/S” (Kingdom of Denmark); Contract between the State Corporation “Türkmengeologiýa” and the company “Yug-Neftegaz Private Limited” (Republic of Singapore) to conduct 3D and 2D studies in the eastern part of the Goturdepe oil and gas field in the Balkan zone in the west of Turkmenistan and in the South Burun region; Contract for the development and construction of the third shipyard for the processing of oil and oil products at the Coastal Completing and Loading Plant of the Turkmenbashi Complex of Oil Refineries between the Turkmenbashi Oil Refinery and Petro Gas LLP (UK); Production Sharing Agreement for a number of offshore blocks with Buried Hill (Cyprus), ARETI (headquartered in Geneva, Switzerland). Fruitful cooperation has also been established with Mitro International (British Virgin Islands), which, together with Turkmen partners, participates in the development of the East Cheleken field as part of the Khazar consortium.

In addition to exports, the most important task of the fuel and energy complex is to meet the growing domestic demand for energy. Thus, in accordance with the economic strategy of Turkmenistan, focused on increasing the volume and range of products manufactured in the country, modern industrial giants related to the oil and gas, petrochemical and chemical industries, electric power, construction industry, etc., have been put into operation in recent years, including specializing in deep processing of hydrocarbon raw materials.

The demand for new types of oil products is steadily growing at such enterprises as the polymer plant in Kiyanly, Balkan velayat, which produces high-density polyethylene and polypropylene of various grades, the Turkmenbashi complex of oil refineries, where units for the production of gasoline obtained from oil refining, as well as the world's first plant for the production of synthetic gasoline from natural gas in Akhal velayat, built with the participation of leading companies and banks in Japan and the Republic of Korea. 

Today, thanks to the reconstruction and technical re-equipment of the TCOR, the complex accounts for a quarter of the volume of industrial products produced in the country - these are high-octane unleaded motor gasolines, aviation, lighting and technical kerosenes, liquefied petroleum gas, various types of diesel fuel, technical lubricating oils and polypropylene, electrode calcined coke, road and building bitumen, packaging film 20, 25 and 30 micrometers thick, white pearlescent polypropylene film of various thicknesses used in candy wrapping and gift wrapping, etc.

In the near future, in accordance with the Program for the Development of the Oil and Gas Industry of Turkmenistan until 2030, it is planned to build new gas chemical complexes in various regions of the Motherland, including the production of linear low-density polyethylene, isobutane, methanol, polyvinyl acetate, liquid chlorine, sodium sulfate, etc. d. Particular attention will be paid to the possibilities of establishing the production of hydrogen, which is being developed as a strategy for the "fuel of the future" in the developed countries of the world. All this will strengthen the innovative component of the economy and increase the share of high value-added products in exports.

Having staked on a deeper and more comprehensive processing of natural gas, Turkmenistan not only consolidated its position in the world market as the largest supplier of energy carriers, but also qualitatively changed the nature of its presence on it due to the diversification of the commodity structure of exports, the active development of new forms of international energy business.

The envisaged implementation of measures aimed at further increasing the production capacity of the industry is closely related to ensuring the energy security of the country. In this context, the importance of natural gas as the most environmentally friendly energy source is becoming increasingly important.

Having ratified the fundamental environmental documents of the UN, including the Paris Climate Agreement, our state is steadily following its obligations. Environmental requirements are the most important factor determining the energy transformation of the domestic fuel and energy complex.

Based on this, over the past years, Turkmenistan, as one of the leading energy powers on the planet, has been carrying out purposeful international activities, focusing the attention of the world community on energy security issues. Annual meetings and conferences testify to the great interest that our country and its potential arouse, demonstrating the desire for dialogue, cooperation, which is a key condition for establishing and developing business ties, searching for promising areas for investment.

This was confirmed by the International Forum on Attracting Foreign Investments in the Oil and Gas Industry of Turkmenistan, held in March this year, organized by the state concerns “Turkmennebit” and “Türkmengaz”, the State Corporation “Türkmengeologiýa” in partnership with the ES “Turkmen Forum” with the support of the British company “Gaffney Cline”.

The event was held not only in the traditional format, but was also broadcast online from Ashgabat to dozens of countries. It was attended by heads and representatives of domestic specialized state institutions, well-known oil and gas business structures, financial institutions, reputable international organizations and diplomatic missions accredited in Turkmenistan, leading experts of companies specializing in this field. In general, the forum brought together representatives of 90 companies from 32 countries.

Such a solid composition of participants is a clear example of the growing investment attractiveness of the Motherland for the world business community, whose desire to increase partnership with Turkmenistan is due to the policy of "open doors", equal and mutually beneficial interstate relations and constructive initiatives of our country in the energy sector.

In his address to the participants of the event, President Serdar Berdimuhamedov emphasized that in order to strengthen one of the leading areas of the national economy - the fuel and energy complex - the state is implementing large-scale projects. It was especially noted that the International Forum will help foreign entrepreneurs to get acquainted with the development strategy of the fuel and energy complex of Turkmenistan, the experience of actively attracting modern technologies, forms of industry services.

Topical issues such as “The Future of the Global Energy System”, “Opportunities for Investment Projects in the New Energy Era”, “The Role of Financial Institutions in Supporting Sustainable Energy”, “Innovative Technologies and Know-How in Hydrocarbon Production and the Reduction of Associated Gas Emissions”, “Experience, potential and prospects of international cooperation in the field of processing and transportation of hydrocarbons” were discussed at the meeting.

The reports emphasized that in the development of natural resources, Turkmenistan demonstrates a responsible approach to their rational use, concern for environmental protection, and the implementation of important international initiatives on energy security. Evidence of this is the commissioning of new industrial facilities that meet high environmental standards. In this regard, in the speeches of foreign delegates, the emphasis was placed on the significance of the creative proposals of our state, which found full understanding and support of the world community and were enshrined in the adopted special Resolutions of the UN General Assembly.

The session on the theme “The role of Turkmenistan in ensuring regional energy security”, held in Ashgabat, was simultaneously broadcast online in the exhibition pavilion of our country at the World Exhibition "EXPO-2020" (Dubai, UAE).

A separate topic of the forum was the harmonization of “green” technologies and diversification of the fuel and energy complex. In this context, it was noted that the solution of this topical issue is facilitated by innovations introduced into the industry and modern, pilot projects implemented and being implemented in the field of energy, including in the field of renewable energy sources, the practical use of solar and wind energy, biofuels.

Experts from well-known oil and gas companies made presentations, shared their accumulated experience, new developments in this area and expressed confidence that constructive multilateral cooperation between states will continue to develop successfully, defining new vectors of interaction in this key sector for the long term.

In general, the openness of the foreign policy of Turkmenistan, consistently implemented under the leadership of President Serdar Berdimuhamedov, the richest natural resources of the country, a favorable investment climate create unlimited opportunities for increasing international cooperation in the oil and gas industry, which will also help strengthen the economic power of the Motherland and improve the welfare of the Turkmen people.

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