Central Asian Gas: prospects for the 2020s
Over the last decade, China has replaced Russia as the main export destination for Central Asian gas. Due to strong gas demand in China, in the early 2020s, the Central Asia-China pipeline corridor will be used close to its 55 Bcm/year capacity. An expansion to 85 Bcm/year is possible, by construction of Line D from Turkmenistan via Uzbekistan, Tajikistan and Kyrgyzstan to China, but this is unlikely to go ahead until it is seen as strategically necessary by China – that is, probably not before the late 2020s. Central Asian exports to Russia may continue to decline. Other routes – the proposed TAPI line to India, or westward exports to Europe via a Trans Caspian pipeline – are very unlikely to be opened up. As for supply, Turkmenistan has ample resources but it may take cooperation with Chinese and other foreign companies to develop them effectively. By contrast, both Uzbekistan and Kazakhstan have supply side constraints. In Kazakhstan, the government expects net exports to fall almost to zero during the 2020s, due both to increased reinjection of gas for oil production, and domestic gasification. In Uzbekistan, most output is committed to domestic consumers: new production from Lukoil, and/or the effects of energy sector reform now in progress, could free up some volumes. The paper considers the prospects for production, domestic markets and export.