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. Last Updated: 07/27/2016

China's CNPC Wins First Gas Field License in Turkmenistan

China's CNPC received a license to develop an onshore gas field in Turkmenistan, the first foreign company to gain such rights in the Central Asian country, the Turkmen government's web site said last week.

The Bagtyyarlyk field, for which CNPC signed a production-sharing agreement in July, will help fill a pipeline that will carry 30 billion cubic meters of fuel per year to China starting in 2009, the web site said. Construction of the 7,000-kilometer pipeline began Wednesday, as Turkmenistan seeks an alternative to exports through Russia.

New fields in the Bagtyyarlyk region will produce 17 bcm of gas per year for export to China, while the other 13 bcm will come from the Samandepe and Altyn Asyr fields, the web site said.

Turkmen President Gurbanguly Berdymukhammedov presented the license to CNPC chairman Jiang Jiemin in a ceremony at the field in western Turkmenistan the same day, the web site said. Bagtyyarlyk could hold an estimated 1.3 trillion cubic meters of gas.

The pipeline will start in the east of the country and pass through Uzbekistan and Kazakhstan. It is still unclear, however, whether Uzbekistan and Kazakhstan -- which will have 530 kilometers and 1,300 kilometers of the pipeline respectively -- have agreed to the plan.

Only 188 kilometers of the pipeline will be built on Turkmen territory and 4,500 kilometers will be in China.

The 30-year production-sharing deal was signed while Berdymukhammedov was visiting Beijing in July.

"With the participation of our Chinese partners, we have now started full-scale work on the ... gas pipeline, which is the most important economical asset for the two countries and their people," Berdymukhammedov was quoted as saying in state newspaper Neutral Turkmenistan.

Bloomberg, Reuters