Auditor: Turkmenistan has second-largest gas field

October 11, 2011 - 10:00 AM

ASHGABAT, Turkmenistan (AP) — The Central Asian nation of Turkmenistan is sitting on top of the second-largest natural gas field in the world, according to figures unveiled Tuesday by an independent British auditor.

The assessment by Gaffney, Cline & Associates will likely be greeted with relish by the ex-Soviet state's secretive government, whose claims that it will be able to provide all prospective customers with energy supplies have faced skepticism. It could also fuel the global race for access to the country's resources.

Auditor representative Jim Gillett said in a presentation in the Turkmen capital, Ashgabat, that South Yolotan holds up to 21.2 trillion cubic meters of gas, putting it only behind the South Pars field, shared between Iran and Qatar.

Gillett said further investigations into the field, which spans an area of about 3,000 square kilometers (1,160 square miles), could yield even greater numbers. Another, smaller field, Yashlar, could hold up to 5 trillion cubic meters of gas, Gillett said. He added that South Yolotan would possibly begin yielding its first gas in three years.

Turkmenistan currently sells to China, Russia and Iran, but it is determined to eventually also export to Western Europe, Afghanistan, Pakistan and India.

Major Western companies have lobbied heavily to be allowed to develop the reserves, but Turkmenistan so far has resisted those overtures.

In late 2009, the government itself began industrial exploration of South Yolotan and signed deals worth a total of $9.7 billion with companies from South Korea, China and the United Arab Emirates to do the work. Much of the funding for that operation has come from China, which has pledged loans worth $8.1 billion to Turkmenistan to develop South Yolotan.

Under a previous estimate made by the auditor, the field was believed to hold up to 14 trillion cubic meters of gas — which would be 7 percent of the world's proven reserves of gas. The new calculation is more in line with those of Turkmen officials.

Turkmenistan's government says total gas production is expected to reach 230 billion cubic meters per year by 2030.

While Turkmenistan has ambitions to expand to new export markets, the pipelines are not yet in place.

The European Union is hoping to claim a share in Turkmen gas via the planned $12 billion Nabucco pipeline, also supported by the United States, which would run 3,300 kilometers circumventing Russia. Filling Nabucco with Turkmen gas would require a separate route running from Turkmenistan's western coast, across the Caspian Sea, to Azerbaijan.

Russia, whose dominant position in Europe's gas market could be diluted by Nabucco, has led calls to block the trans-Caspian pipeline proposal.

Turkmenistan also has designs on exporting through another prospective pipeline that would traverse neighboring Afghanistan, run through Pakistan and end in India.

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Peter Leonard contributed to this report from Almaty, Kazakhstan.