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Turkmenistan says China gas pipeline debt has been paid in full
China's President Xi Jinping (2nd L) and Turkmenistan's President Gurbanguly Berdimuhamedow (3rd L) stand during opening ceremony of the purification plant in Galkynysh gas field which is the largest in Turkmenistan, nearly 500km away from the capital Ashgabat, September 4, 2013. China's President Xi Jinping arrived in Turkmenistan as part of his first trip to Central Asia since he took office in March.Photo: AFP

After AF reported that China would slow gas purchases from Australia amid souring relations, autocratic Central Asian leader  says it is clear of debt to Beijing

 

(AF) Turkmenistan’s gas supply ties to China have tightened as Beijing shuns Australia, another large supplier.

The Central Asian nation’s autocrat leader said that his country’s debts to China for a multi-billion-dollar gas pipeline and another gas project had been paid off “in full”, state media reported Saturday.

The announcement comes after AF exclusively reported that China was poised to increase its gas supplies from Turkmenistan as relations with Canberra sours.

China has invested billions in the development of Turkmenistan’s gas industry, establishing itself as the isolated country’s number one destination for exports.

Beijing’s most important projects in the country are the pipeline that begins in eastern Turkmenistan and reaches China via Uzbekistan and Kazakhstan and a multi-stage development project at Galkynysh, the world’s second-largest gasfield.

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President Gurbanguly Berdymukhamedov said Turkmenistan had paid off loans provided by China for the pipeline and the first stage of Galkynysh’s development “on time and in full”, according to a report in the Neutral Turkmenistan newspaper.

The same news report cited Turkmenistan’s oil and gas chief Shakhym Abdurakhmanov as saying that the China Development Bank had acknowledged Turkmenistan’s full repayment of the debts in a note sent to Turkmenistan on June 8.

Neither Berdymukhamedov nor Abdurakhmanov made reference to the amount that had been repaid.

During a visit to the country in 2011, China Development Bank’s then-president Jiang Chaoliang said that the bank had loaned Turkmenistan $8.1 billion for the projects.

The pipeline known as the Central Asia-China pipeline began deliveries in late 2009 and currently has three strands.

Line D

A fourth strand known as “Line D” that would involve Kyrgyzstan and Tajikistan as transit countries in the project is yet to be completed.

Turkmenistan’s gas exports to China typically exceed 30 billion cubic metres per year – around six or seven times the volumes it sends to its next largest purchaser, Russia.

While Turkmenistan regularly posts rosy economic growth figures, reports from foreign rights groups have indicated that the country is enduring protracted hard currency and food crises.

Berdymukhamedov made a rare admission of economic failure earlier this year when he told the government to consider asking creditors to prolong periods for debt repayments.

Hydrocarbons account for over 90 percent of Turkmenistan’s exports.

  • AFP

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.

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