Azernews.Az

By Aynur Jafarova

Turkmenistan and China agreed to start negotiations on financing the second phase of development of Turkmenistan's giant Galkynysh field, local Turkmen media reported on September 4.

According to the report, the agreement on cooperation on financing the second phase of development of the Galkynyh field was signed in Ashgabat between Turkmengas State Concern and the State Development Bank of China.

Furthermore, a contract on purchase and sale of 25 billion cubic meters of natural gas a year was signed between the Turkmengas State Concern and the China National Petroleum Corporation.

According to the report, this volume will be delivered from the Galkynysh field in the framework of the contract which envisages the designing and building of a facility for production of export gas with the capacity of 30 billion cubic meters per year.

On September 4, Turkmen President Gurbanguly Berdymukhamedov and his Chinese counterpart Xi Jinping who was on a two-day visit to Ashgabat attended the opening ceremony of production facilities in Turkmenistan's giant Galkynysh field.

The Galkynysh field located in Turkmenistan's Mary province is considered as the second largest deposit in the world, with reserves of 26.2 trillion cubic meters.

Turkmenistan is one of the key players in the energy market in the resource-rich Caspian region. The Central Asian state has the world's fourth largest natural gas reserves after Russia, Iran and Qatar. It produces about 70-80 billion cubic meters of gas a year.

The aspects of the energy strategy carried out by Turkmenistan are to increase the production volume and export of natural gas, to diversify the routes of supply to major world markets.

In accordance with the program for oil and gas development, it is planned to increase the country's annual natural gas production to 250 billion cubic meters by 2030, mostly for export purposes.

Each year the country exports raw materials to Russia, China and Iran.

In May, 2013 chairman of Turkmengas State Concern Kakageldy Abdyllayev said at the 4th International Gas Congress that the Galkynysh field can be a resource base for increasing the export in various directions, including to China.

Chinese Ambassador to Turkmenistan Xiao Qinghua believes that the largest gas pipeline in the world - Turkmenistan-China, which was commissioned in December 2009, has become the new Silk Road, strengthening friendship and cooperation between Turkmenistan and China.

China is Turkmenistan's long-term partner in the oil and gas sector and is the largest creditor in the country's fuel and energy industry as well.

Diplomatic relations between the two countries were established in 1992. At present, China holds first place in the total foreign trade turnover of Turkmenistan. The trade turnover between the two countries exceeded $10 billion in 2012.