Turkmens to send Turkey 16 bn cm of gas per year via trans-Caspian line

May 18, 1999 02:00 AM

A Turkish delegation led by Energy Minister Ziya Aktas travelled to Ashgabat to sign a gas supply accord.
Under the agreement, Ankara will buy 16 billion cubic meters of Turkmen gas per year for a period of 30 years, beginning in 2003, Turkish officials said. Turkmen President Saparmurad Niyazov, however, said that he hoped to see his country begin supplying Turkey in 2002.
Niyazov stated that Ashgabat was willing to supply fuel at a price of $ 78 per 1,000 cubic meters but did not specify whether this figure included the cost of transport from the field to Turkey.
The Turkmen president also stated that he expected construction of the pipeline that, under the agreement, will be used to send the Turkmen gas to Turkey to begin this year.
The pipeline will follow an underwater route across the Caspian Sea to Turkey and then pass overland through the southern Caucasus via Azerbaijan and Georgia.
Turkey's state pipeline concern Botas has already begun work on some sections of the pipe andexpects to finish laying a new pipeline between the eastern city of Erzurum and the Georgian border by the end of 2001.
The Turkish section of the pipe will carry some Iranian gas, which Ankara will buy under a separate supply agreement with Tehran.
Turkmenistan hopes eventually to transport 30 billion cubic meters of gas per year through the trans-Caspian pipeline, with 16 billion cubic meters per year going to the Turkish market and 14 billion cubic meters per year going through Turkey to Europe.

Turkmenistan has already awarded a contract for construction of the pipeline to PSG International, a consortium set up by Bechtel and General Electric of the United States. The group has yet to select its partners for the project, which is expected to require at least $ 2.0-2.5 billion in investment. Niyazov said he expected PSG's line-up to be finalised by mid-July.

Turkish Energy Ministry officials said last week that the supply agreement would provide a solid legal foundation for construction of the trans-Caspian pipeline. Intergovernmental and host-government accords with the other states along the pipeline route will be drawn up as soon as possible, they explained. However, Western experts said that it was still not clear how PSG could finance this ambitious gas transport project, which has won strong support from the U.S. government. The Turkmen economy has in recent years been under great pressure, and many international lenders have expressed concern about Ashgabat's high foreign debt burden. Niyazov said he hoped to see the matter of financing cleared up by July but did not say whether any potential lenders had stepped forward.

Source: NewsBase
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