Turkmenistan, often referred to as the “Hermit Kingdom” of Central Asia, is poised to transform the European Union’s energy import landscape. The country, which declared its independence following the collapse of the Soviet Union in 1991, has long pursued a policy of isolation. Unlike many former Soviet states, Turkmenistan has maintained minimal engagement with its neighbors and even considered declaring itself a neutral state like Switzerland.
However, as the global economy has evolved, Turkmenistan recognized the need to engage more with the world, particularly its energy sector.
Energy Resources
Turkmenistan sits on vast natural gas reserves. These were identified by Soviet-era geologists, but for years, the country struggled to tap into this potential. Issues such as insufficient funding, technical challenges, and a lack of a strong energy policy hindered the development of its gas sector.
Today, experts estimate Turkmenistan holds the fifth-largest proven natural gas reserves globally. Yet, despite this wealth, the country has primarily relied on exports to Russia and China, and avoided striking deals with Western nations. Many believe Turkmenistan’s leadership has been wary of Western influence, particularly from energy cartels.
TAPI Pipeline
In the 1990s, Turkmenistan proposed the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline, a project aimed at transporting gas from Turkmenistan to South Asia via Afghanistan. However, the project faced significant political and security obstacles. After the political shift in Afghanistan in 2021, progress stalled, and interest from India and Pakistan waned.
New Initiative: Gas Swap Agreement
In a shift away from its isolationist stance, Turkmenistan has recently moved forward with a new initiative that could significantly impact both its economy and the European Union’s energy imports.
In early March 2025, Turkmenistan began a gas swap agreement with Iran and Turkey, marking the first time its natural gas will be routed westward, bypassing Russia. The deal involves Turkmenistan supplying gas to Turkey through a pipeline running beneath the Caspian Sea, with further connections to the Southern Gas Corridor, which extends into Central Europe.
This pipeline deal could see Turkmenistan’s gas exports to Turkey increase to 2 billion cubic meters (bcm) annually by 2026, with the potential to reach 65 bcm to the EU over the next 25 years.
Strategic Impact
Although the initial gas volumes are modest, the deal holds significant strategic value for Europe’s energy diversification. According to political analyst Rauf Mammadov, this agreement offers European nations more bargaining power in future energy discussions, especially if Russian gas is reintroduced.
If successful, this arrangement could shift the European Union’s energy import patterns, reducing reliance on Russian energy sources.
Overview
Turkmenistan has long relied on China as its primary gas customer, but the country is now seeking new markets. The recent swap deal with Iran and Turkey represents a major step forward in diversifying its exports. Turkish Energy Minister Alparslan Bayraktar confirmed that a deal between Turkiye’s state-owned BOTAS and Turkmenistan’s Turkmen Gaz will bring Turkmen gas to Turkey.
While the deal faced challenges in 2024, including a new LNG agreement between Turkey and France, both Ankara and Ashgabat have not yet indicated how these new LNG agreements might affect the gas swap plan. However, the underlying reality is clear: the more gas Turkey imports from other sources, the less reliant it will be on Turkmenistan.
In March 2024, Turkmenistan President Serdar Berdymukhamedov and Turkish President Tayyip Erdogan finalized the swap deal, which would send Turkmen gas to Turkey through two possible routes: across the Caspian Sea to Azerbaijan or via Iran.
Natural gas, unlike liquefied natural gas (LNG), is transported through pipelines. While Turkmenistan and Turkey do not share a direct border, their connection through Iran allows for a swap arrangement. Gas from Turkmenistan would be sent to Iran, and in return, Iran would supply equivalent amounts of gas to Turkey.
This new deal is seen as a historic step in energy cooperation between Turkey and Turkmenistan. With the partnership gaining momentum, the future of energy exports from Turkmenistan looks set to reshape regional energy dynamics.
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