Turkmenistan to supply 9 Bcm/year of gas to Iraq under diversification drive

Turkmenistan expects to supply 9 Bcm/year of natural gas to Iraq under a swap agreement involving Iran, Turkmengas Deputy Chairman Myrat Archayev said Oct. 25, as the Central Asian country looks to diversify export markets.

Turkmenistan is one of the world's largest gas resource holders thanks to the giant onshore Galkynysh field, but has been constrained in its export options due partly to its landlocked position.

Negotiations with international investors on the second and third stages of the Galkynysh development are expected to make a "breakthrough" in 2024, Archayev said during the Oil & Gas of Turkmenistan forum in Ashgabat; Turkmenistan has relied so far on a partnership with China's CNPC.

On export development, Turkmenistan needs to find new markets for its gas, and attaches "great importance" to processing the gas as well, Batyr Amanov, deputy chairman of the country's cabinet of ministers, said at the forum.

Developing export markets is "essential" for the development of gas production, led by the Galkynysh field, with the country's main markets currently being China and Russia, Amanov said.

Iraq's minister of electricity, Ziad ali Fadel, was expected among the attendees in Ashgabat.

Turkmenistan's gas production last year is estimated at 74.4 Bcm, down about 6% on the year after Russia's Gazprom reduced its imports of Turkmen gas to 5 Bcm from 10.6 Bcm in 2021, according to S&P Global Commodity Insights estimates in June.

Turkmengas Chairman Maksat Babayev led a delegation to Baghdad over Oct. 5-8 and held "detailed negotiations" with Iraq's minister of electricity, Fadel, to supply gas to Iraq under a swap arrangement through neighboring Iran, the Turkmenistan State News Agency reported, citing a statement from the Turkmenistan ministry of foreign affairs.

It followed the signing of a memorandum of understanding on imports of gas from Turkmenistan to Iraq earlier in the month.

Iraq has been importing around 1.5 Bcf/d from Iran through two pipelines, but supply has been inconsistent -- thought to be a reflection of difficulties transferring payments in US dollars to Iran because of US sanctions, and increased Iranian domestic demand during summer.