China signs deal to buy more gas from Turkmenistan

Jun 21, 2009 02:00 AM

China signed a 30-year deal to increase purchases of natural gas from Turkmenistan by 30 %. No value was announced for the deal, which also marks a step forward in Chinese efforts to find long-term, stable energy supplies.
Chinese Vice Premier Li Keqiang met with his Turkmen counterpart to sign the contract, which increases gas deliveries to 40 bn cm annually.

Work on a 7,000-km pipeline from Turkmenistan to China is expected to be finished by the end of the year.
"This agreement is very important for ensuring a stable, long-term and adequate supply of gas for this pipeline," Li said at an official signing ceremony. China has also committed to lending Turkmenistan's state gas company $ 4 bn on preferential terms. China had promised to lend $ 3 bn to develop the vast South Yolotan natural gas field close to the Afghan border. An independent audit by a British company last year said the field may be one of the five largest in the world.

Li also signed an additional deal for state-owned China National Petroleum Corporation to take gas from the Bagtyyarlyk field near Turkmenistan's border with Uzbekistan. The Turkmen government believes the field holds up to 1.3 tcm of gas. CNPC was awarded the license to explore and develop the field in 2007.
Turkmenistan has long exported nearly all its gas to Russia, with the exception of a small amount sent to Iran. Some international experts have voiced doubt that Turkmenistan could meet all its supply obligations, but the government insists there is enough gas to supply all buyers.

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