Turkmenistan, S. Korea sign $4 billion gas deal

Turkmengaz will work with South Korea's LG and Hyundai to build a gas-processing plants in Turkmenistan in a deal woth $4 billion.

Turkmenistan, S. Korea sign $4 billion gas deal

World Bulletin / News Desk

Turkmenistan and South Korea have agreed to build a natural gas-processing plants worth $4 billion in the Central Asian country after South Korean leader Park Geun-Hye met with counterpart Gurbanguly Berdymukhammedov on Friday.

The deal was one of many signed, permissing Turkmengaz and South Korea's LG and Hyundai to build the gas-processing plants in Turkmenistan, during Park's first visit to Turkmenistan as part of her Central Asia tour.

Saying that the two countries complement each other economically, Park added "you have energy resources and we are experienced in economic development and high-tech."

Berdymukhammedov likewise pointed out that South Korean businesses are already present in Turkmenistan, having implemented nine projects worth $5.5 billion.

THE RISE OF TURKMEN GAS

Turkmenistan has the fourth largest gas reserves in the world estimated at 32 trillion cubic meters.

Already producing around 80 billion cubic meters of gas per year of export for Chinese, Russian, Iranian and central Asian markets, Turkmenistan is also becoming an alternative to Russian gas for Europe.

Along with a number of projects to increase its export of gas to meet demand, a planned pipeline from Turkmenistan across the Caspian Sea to Azerbaijan and Turkey is set open the way for gas to be transported to the European market.

Turkmenistan, which has traditionally seen the Asian continent as a more attractive market for its gas reserves, is also looking for alternative markets, with tensions mounting along the Kyrgyzistan-Tajikistan border putting pipelines to China increasingly under threat.

Also, with neighbor Kazakhstan already in the Russian-led Customs Union and Kyzgyzstan becoming likely member in the future, old Soviet alliances could cause problems for Turkmenistan's eastern exports.

Last month's natural gas deal between Russia and China will also add an element of competition to lower prices for the Chinese market, while Russia ally Iran could also potentially block deliveries to the West.

Last Mod: 21 Haziran 2014, 17:13
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