Energy Politics and Turkmenistan

With vast energy resources, Turkmenistan is a strategically located nation in Central Asia. The natural gas industry is Turkmenistan’s principal source of hydrocarbons; the country has the fourth-largest natural gas reserves in the world, and hydrocarbon exports make up more than 25% of its gross domestic product (GDP). Nearly half of Turkmenistan’s workforce is employed in the agriculture sector, which contributes just about 8% of the country’s GDP. It is significant to highlight that Turkmenistan only receives a little amount of FDI outside the energy industry. By promoting foreign investment in other industries including agriculture, textiles, construction, and tourism, the government has been attempting to diversify the economy. Despite having the fourth-largest natural resource reserves in the world, the country’s export potential is constrained by insufficient infrastructure.


The Central Asian Centre (CAC)system, which carries Turkmen gas to Russia, served as Turkmenistan’s primary conventional export route. When Turkmenistan originally declared its independence, Moscow officials thought that gas from Turkmenistan would be supplied to the market via the outdated pipeline network from the Soviet era at costs more favourable for Russia than Turkmenistan. By purchasing Turkmen gas at low prices to meet domestic demand and selling it to European states, Russia maintained its monopoly on the Turkmen market and generated significant profits from the largest European market. The CAC system is divided into two branches, the first of which transports gas from Turkmenistan to Russia via Uzbekistan and Kazakhstan, and the second of which begins in the Caspian Sea and connects to the first branch in western Kazakhstan. The gas pipelines continue north from there, where they join the Russian gas pipeline network.

Due to a disagreement over natural gas prices, tensions between Turkmenistan and Russia started to increase in 2007. Since the dissolution of the Soviet Union, Turkmenistan has sold natural gas to Russia at a discounted rate; nevertheless, the two nations have been unable to agree on gas pricing. Later in 2009, when Russia stopped accepting Turkmen gas, tensions between Turkmenistan and Russia grew much worse. In reaction to Turkmenistan’s rejection of the price proposed by Russia, this was done. Given that Turkmenistan is Russia’s primary natural gas supplier, the issue caused significant disruptions in the flow of gas to Europe. In 2010, when Russia and Turkmenistan agreed on a new pricing structure, the conflict was eventually addressed.


Due to the growth of energy ties and the quick supply of Turkmen gas in significant quantities to China, China has replaced Russia as Turkmenistan’s primary trading and economic partner. China is seen by Turkmenistan as a promising partner that has a need for gas and might help the country overcome its meagre natural gas exports. In December 2009, a brand-new gas pipeline project that runs across Turkmenistan, Uzbekistan, Kazakhstan, and the majority of China was finished.4 The first two gas pipelines have a combined capacity of 30 billion cubic metres of gas per year, while the third pipeline, which has a combined capacity of 25 billion cubic metres of gas per year, was finished at the end of 2014. An agreement on the construction of a fourth gas pipeline with a 25 billion cubic metre annual capacity has already been reached between Turkmenistan and China. The fourth gas pipeline is currently being built.


Iran receives Turkmen gas through two pipelines. By building the Korpeje-Kordkuy pipeline, Turkmenistan implemented a replacement for the outdated CAC system for the first time in 1997. It connects the nation’s gas with Iran and has a length of 200 kilometres and a capacity of 8 billion cubic metres.


The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline is an important alternative project supported by the government of Turkmenistan, but nevertheless overshadowed by geopolitical uncertainty in the region due to the instability of Afghanistan and the Kashmir issue. The planned length of the gas pipeline is 1,735 km, including 200 km on Turkmen territory, 773 km on Afghan territory and 827 km on Pakistani territory to a village on the border in India. The annual capacity of the pipeline is expected to reach 33 billion cubic meters, but due to geopolitical problems, this project may not have a future.

Trans-Caspian Pipeline

The goal of this project is to lessen Turkmenistan’s reliance on Russia. Turkmenistan might supply gas to Europe via the proposed Transcaspian gas pipeline, providing a substitute for Russian gas, but the project is stalled by objections from Russia and Iran. It will go 300 km (about 186.41 mi) down the Caspian Sea’s floor to Azerbaijan, where it will connect to the Baku-Tbilisi-Erzurum pipeline and possibly the Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP).

Resource of Turkmenistan

As far as the agricultural make-up of Turkmenistan is concerned, following data show the country’s reliance on agriculture for its economy. In 2010, the agriculture sector of the country amounted to the sum of 12 percent of the gross domestic product (GDP). It was about 24 percent in 2000. According to statistics from 2011, there are approximately 0.7 million people who are actively engaged in agriculture. That represents 29% of the total population. For small-scale productions, the residents of rural areas are given access to irrigable land, which can be as small as 0.01 ha or as large as 0.25 ha. Farmers typically cultivate fruits, vegetables, beans, and berries on their land in addition to raising cattle for milk and meat. Among the cultivated crops, wheat and rice are the main contributors to the nation’s food security. To address local food needs, the government sponsors irrigation and small-scale agriculture projects.

Turkmenistan’s place in the Great Silk Road

According to the Secretary General of the Economic Cooperation Organization, Halil Ibrahim Akca, connecting operational networks across sea, roadways and railways would enable the ECO region to take enormous strides forward as all the required resources exist on the Great Silk Road. Speaking at the international forum “Great Silk Road – Path to New Development Highs” on May 2, 2018, Ambassador Akca had this to say. He continued by saying that by improving regional infrastructure, transport, transit, and logistics, the socioeconomic circumstances of the region’s residents may be significantly enhanced.

A cutting-edge maritime transportation network across the Caspian Sea can be established with the help of the new $1.5 billion Turkmenbashi International Seaport. His administration has also made the neighboring. The main passenger harbor and cargo port is the new port, which is in Eastern Turkmenistan. It has a surface area of about 375 acres, ferry terminals, passenger-cargo terminals, and terminals for 17 vessels to be served simultaneously.

The Central Asia Centre (CAC) system has been used by Turkmenistan to export gas to Russia historically, but tensions between the two nations have increased as a result of disagreements over natural gas prices. With the signing of agreements for the construction of four gas pipelines, China has emerged as Turkmenistan’s top trading and economic partner. Aiming to enhance its gas exports to Europe via the Trans-Caspian Pipeline, Turkmenistan has also created export lines to Iran and India. Russia and Iran’s objection to the Trans-Caspian Pipeline project, as well as the legal status of the Caspian Sea and other geopolitical difficulties, all pose obstacles to its construction.

Fatima Arshad
Fatima Arshad
Student of Bachelors in Strategic and Nuclear Studies from National Defence University, Islamabad.