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. Last Updated: 07/27/2016

Petronas Plant to Draw Gas from Turkmen Field

ASHGABAT, Turkmenistan -- Malaysian state energy firm Petronas plans to build a plant in Turkmenistan to extract natural gas from an oil field, boosting the country's gas output, state media said Wednesday.

Petronas started operating an offshore oil field in the Caspian Sea under a production sharing agreement in late 2006.

The processing plant for gas associated with crude oil was expected to produce up to 10 billion cubic meters of gas per year -- one-sixth of the country's current output -- after completion in 2010, state-run newspaper Neutral Turkmenistan said. The project is worth $500 million, it said.

Most of Turkmenistan's natural gas output flows through Soviet-era pipelines to Russia.

In a deal widely seen as sidelining European and U.S. hopes for new export routes bypassing Russia, Moscow last month agreed with Turkmenistan and Kazakhstan to augment existing infrastructure and build an additional pipeline along the shore of the Caspian toward Russia.

But Turkmen President Gurbanguly Berdymukhammedov, speaking on state television, reiterated on Wednesday that the country wanted to diversify its outlets for natural gas over the long term.

"As a country with great natural resources, Turkmenistan wants them to be exported to many markets," he said.