Turkmenistan: The Engine of Natural Gas Production in Central Asia


INSIGHT


  • TURKMENISTAN HAS SOME OF THE LARGEST NATURAL GAS RESERVES IN THE WORLD. THIS WILL PROVIDE TURKMENISTAN WITH THE ENERGY IT NEEDS TO BUILD A STRONG INDUSTRY.

  • TURKEY CAN CONTRIBUTE TO THE ECONOMIC DEVELOPMENT OF TURKMENISTAN. AS TURKEY EXPANDS ITS ECONOMIC FOOTPRINT IN WEST ASIA, INFRASTRUCTURE PROJECTS WILL LINK CENTRAL ASIA TO TURKEY. THE SILK ROAD INITIATIVE WILL PLAY A CENTRAL ROLE. CHINA WILL BE A KEY PLAYER IN MAINTAINING THE MOMENTUM OF THE SILK ROAD INITIATIVE. WE SEE THE IMPACT OF THE SILK ROAD INITIATIVE IN TURKISTAN’S NEIGHBORING COUNTRY, KAZAKHSTAN.

  • TURKMENISTAN IS CENTRALLY LOCATED IN CENTRAL ASIA. THIS ALLOWS TURKMENISTAN TO COOPERATE WITH COUNTRIES IN MANY LOCATIONS. THANKS TO ITS DOMESTIC NATURAL GAS RESERVES, TURKMENISTAN IS ABLE TO EXPORT NATURAL GAS, WHICH GENERATES ADDITIONAL REVENUE.


 

1. The geographical position of Turkmenistan on the Eurasian landmass.


Turkmenistan has the advantage of being in a geopolitically strategic position. The Central Asian country has significant energy resources, both oil and gas reserves. Nevertheless, natural gas production stands out. In this sphere, Turkmenistan competes globally and attracts significant foreign investors. This brings with it the possibility of advancing the economy. Among other things, Turkmenistan could take a leading role in the chemical industry, where it can fully exploit its domestic fossil fuel reserves. Hydrocarbons play a central role in the chemical industry and are an important cost component. Supporting the chemical industry can give Turkmenistan a major cost advantage over its competitors.


2. Natural gas will play a central role in the economy of the 21st century.


Natural gas is at the very heart of the Eurasian energy industry. Pipelines are much cheaper to operate than other forms of land-based transportation because of their inherent economics. Operating costs are often much lower and you can get natural gas from many sources and deliver it to a specific location without having to maintain an expensive road network and truck deliveries. In logistics, every mile has a cost.

The geographic characteristics of many Central Asian countries also play a role. Central Asian countries that do not have access to the coast can benefit from pipelines to connect with their neighbors and improve trade. 


3. On how to develop trade relations between Turkey and Turkmenistan.


There is always the option to further intensify trade between Turkey and Turkmenistan. Indeed, trade between Turkmenistan and Turkey can be further enhanced to serve markets in West Asia and Central Asia. This also has to do with the fact that Central Asia is an energy-rich region. It must be emphasized that the Eastern Mediterranean has become an energy-rich region in its own right. Nevertheless, Turkey may benefit from more diversified energy options to the east.

Turkey may benefit from the plentiful energy reserves of Turkmenistan. The question is actually if Turkey is able to expand cooperation with Central Asian countries in the medium-term. There are many geopolitical considerations. Given Turkey’s geography, there are a great many geopolitical objectives. Turkey must account for political dynamics in all regions along all its borders. This may mean Turkey is driving cooperation with countries to Turkey’s south, the Balkans, the Mediterranean, the Black Sea region, and the Caucasus. Nevertheless, the Caspian Sea region should be of great interest to Turkey, as it is a unifying area for trade in this region. 


4. Conclusion


  • Turkmenistan can expand into other economic sectors related to hydrocarbon production. The chemical industry could be of particular importance. Turkmenistan has the advantage of having fossil fuels available in the country.

  • The nation can benefit from regional integration with countries with which it has historical ties, Turkey and Russia among many other international partners.

  • Further regional integration of the Caspian Sea region can lead to even greater economic benefits that can accrue to all states sharing a Caspian Sea coastline.


5. References


Deffeyes, K S 2006, Beyond Oil: The view from Hubbert’s Peak, Hill and Wang, ISBN 0-8090-2957-X, United States.


 

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