Turkmenistan Tops Russia in Gas Export Earnings to China

• Turkmenistan earned $2.4 billion from gas exports to China in the first quarter of 2024, while Russia earned $2 billion.
• Russia's need for cash amid the Ukraine war has reduced its negotiating leverage with China, leading to lower gas prices.
• Turkmenistan plans to develop the world's largest gas field at Galkynysh, which will further boost its gas exports.

Russia’s energy behemoth Gazprom announced with great fanfare in early 2024 that it had overtaken Turkmenistan as China’s largest supplier of natural gas in terms of volume. But when it comes to export earnings, Ashgabat still tops Moscow.

The Turkmen portal, Oil & Gas, reports that during the first quarter of this year, Ashgabat generated $2.4 billion in income from gas exports to China. That figure was confirmed by Daryo, Uzbekistan’s most popular news website. The Daryo report noted that Russia earned $2 billion from its gas sales to Beijing during the same period.

The reason for the volume-earnings differential is that China is hoovering up Russian gas at bargain basement prices. The Kremlin’s need for cash to keep the country afloat while maintaining its war effort in Ukraine has deprived Russia of most of its negotiating leverage in its dealings with Beijing.

Russia’s edge in export volume may last only as long as the steep pricing discounts continue. An independent outlet, The Chronicle of Turkmenistan, reported that the capacity of Russia’s Power of Siberia gas pipeline to China is projected to be 38 billion cubic meters (bcm) in 2025. Meanwhile, the collective capacity of three pipelines connecting Turkmenistan and China totals 55 bcm.

Turkmen state-affiliated media outlets have cast some shade on the Kremlin’s exports: in reports about Ashgabat’s gas earnings from China they have omitted mention of Russia. For example, in addition to Turkmenistan, a report published by Turkmenportal names only Australia ($3.6 billion), Qatar ($3.1 billion) and Malaysia ($1.15 billion) as key suppliers, mainly with liquefied natural gas. 

Meanwhile, the head of Turkmengaz, Maksat Babayev, has announced plans to develop what he described as the “world's largest gas field” at Galkynysh. The first stage of development already “stably ensures the export of 30 bcm of gas per year to China,” the second stage will bring another 25 bcm of gas per year online. A third phase of development can supply the long-planned Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project with a projected capacity of capacity of 33 bcm, according to Turkmenportal.

By Eurasianet.org

More Top Reads From Oilprice.com:

• Large Crude Inventory Build Rocks Oil Prices
• ExxonMobil Underwhelms With Q1 Earnings
• UAE Quietly Boosts Oil Production Capacity Ahead of OPEC Meeting