Gas deal to double Turkmen imports to China

Chinese President Xi Jinping and his Turkmen counterpart Kurbanguly Berdymukhamedov Wednesday jointly announced the completion of the first phase of construction of the Galkynysh gas field in Turkmenistan after both sides signed an additional energy deal that will likely double imports of Turkmen natural gas to China in the coming years.

"The project, testifying to the willingness of the Chinese and Turkmen peoples to boost development through cooperation, will inject fresh and strong impetus to energy cooperation between the two countries," said Xi, adding that the two countries have unleashed new opportunities for deepening energy cooperation.

The purchase agreement for the 25 billion cubic meters (bcm) of gas a year was signed on Tuesday between China National Petroleum Corp and state firm TurkmenGas as Xi started his first Central Asian state visit in the Turkmen capital of Ashgabat.

The two countries had already signed 40 bcm of gas deals by 2009. Turkmenistan is expected to export 65 bcm of gas annually by 2020.

According to data from China's Ministry of Commerce, China imported a total of 40.8 bcm of natural gas in 2012, a 29.9 percent growth from the previous year. Roughly half of the imports came from Turkmenistan.

Energy experts believe the gas deals represent China's efforts to seek diversified sources of energy as energy demands surge with the booming economy.

"China used to and still does depend heavily on oil from the Middle East, but as unrest grows in the area, it is important for China to seek other stable sources to eliminate the impact of Middle East turmoil on its economy," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times.

Lin's opinion was echoed by Wu Dahui, director of the Eurasian Strategic Research Center under Tsinghua University, who said that Turkmenistan is also seeking to diversify its natural gas customers.

"A great proportion of Turkmenistan's natural gas exports go to Russia, which, to this day, still holds the best natural gas contract with the country," said Wu. "In today's world, energy holds a lot of sway in foreign relations. Turkmenistan, while seeking diversified customers, is looking to balance the influence."

Xi and Berdymukhamedov also decided to lift bilateral ties to a strategic partnership after talks on Tuesday.

"Over recent years, the two countries have enjoyed high political mutual trust and witnessed fruitful cooperation in economy, trade, energy and culture," said Xi, noting that China has become Turkmenistan's largest trading partner.

China supports Turkmenistan's policy of permanent neutrality, and stands ready to maintain high-level contact and expand exchanges between governments, legislatures and political parties, he added.

In addition, Xi urged the two sides to enhance law enforcement and defense cooperation, strengthen communication and coordination on regional affairs, and support an "Afghan-led and Afghan-owned" reconciliation process in Afghanistan.

Xi left Turkmenistan Wednesday for the G20 summit to be held in St Petersburg on Thursday and Friday.

Chinese Deputy Finance Minister Zhu Guangyao said upon his arrival in St Petersburg on Tuesday that China will put its house in order, continue structural economic reforms, and improve the quality of its economic growth, Xinhua reported Wednesday.

Zhu is confident in China achieving 7.5 percent growth in 2013, and also believes that inflation will be kept under 3.5 percent, with the creation of 10 million new jobs.