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Turkmenistan and China to hold talks on gas price

Turkmenistan and China to hold talks on gas price

Turkmenistan and China need to start negotiations on the price of the natural gas to be supplied through the fourth branch of the gas pipeline. Today, President of Turkmenistan Gurbanguly Berdimuhamedov stated it at the talks with Chinese President Xi Jinping, held in Beijing during which the parties reached an agreement on the construction of a new branch of the gas pipeline, instructing the Turkmen-Chinese and Chinese-Turkmen Cooperation Committees to carry out appropriate joint work in this direction. The Information Program "Watan" of the Turkmen Television reported it.

"In the process of future cooperation on the implementation of the fourth line of the construction project, it is necessary to start discussing gas prices," the President of Turkmenistan said.

Berdimuhamedov expects that in working together on these issues, the Turkmen and Chinese specialists will rely on the international experience in the field of pricing for product pipeline gas.

It should be noted that the world energy prices, especially for oil and natural gas, have risen sharply and continue rising in recent months. According to Wood Mackenzie, the price of natural gas supplied by Turkmenistan to China was $ 192 per thousand cubic meters in January last year, and in July the price rose to $ 238. Data on the price of the Turkmen blue fuel for August-January is not currently made public.

During the meeting, the Turkmen leader reiterated his readiness to discuss specific issues on increasing the supply of the Turkmen natural gas to China through the construction of the fourth branch of the Turkmenistan-China gas pipeline.

Berdimuhamedov also stressed the need to determine the volumes of gas that is expected to be exported to China, as well as to analyze the possibilities of upgrading the second stage of the Galkynysh gas field – the main resource base for natural gas supplies to China via the fourth line (D).

According to him, here one of the main issues is the establishment of a production and gas transportation base on the territory of Turkmenistan that will ensure the supply of the "blue fuel" along the fourth branch.

"I believe that in the near future our specialists will start discussing the construction of a gas sweetening plant, compressor stations and a gas pipeline from the Galkynysh field to the border of the neighboring state," the President of Turkmenistan said.

Berdimuhamedov noted that upon reaching bilateral agreements, the Turkmen party may consider the participation of the Chinese company in the development of the second phase of the Galkynysh field from direct investments of the PRC.

"The return of these investments will be carried out by the supply of the Turkmen natural gas," the Head of Turkmenistan said.

Meanwhile, China is increasing cooperation with Russia in the gas industry too. On Friday, Gazprom and CNPC signed a 25-year contract for the supply of 10 billion cubic meters of gas from the Far East to China during a visit to Beijing by Russian President Vladimir Putin.

The Turkmenistan–China main gas pipeline includes three parallel lines (A, B and C) running along the Turkmenistan-Uzbekistan-Kazakhstan-China route. The main volume of the gas supplies to China – 35-40 billion cubic meters per year – is provided by Turkmenistan. Natural gas is supplied to 25 provinces of China and the Hong Kong Special Administrative Region. In total, over 320 billion cubic meters of the Turkmen gas have been exported to China since the operation of this gas pipeline.

Gas consumption is growing in China. According to the agreements reached earlier, the supply of the Turkmen natural gas to China should increase to 65 billion cubic meters per year after the commissioning of the fourth branch of the gas pipeline.

The route of the 4th line will be laid from the border of Turkmenistan through the territory of Uzbekistan, Tajikistan and Kyrgyzstan. It is designed to supply gas to the southern and central part of the Xinjiang Uygur Autonomous Region of China. Its length is about 1000 km, and its throughput capacity is 30 billion cubic meters of gas per year. The total cost of the project is 6.7 billion US dollars.

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