Turkmenistan’s Gas Bonanza

turkmenistan103008.jpg (AFP/Getty Images) The Financial Times is reporting that an independent audit of Turkmenistan’s much lauded South Iolatan field has been completed, confirming it as one of the five largest deposits of natural gas in the world, boasting reserves more than twice the size of Russia’s (in)famous Shtokman Field in the Barents Sea. Jonathan Stern of Oxford tells the FT that the field could take a long time to develop, and that “for now, the race for Turkmenistan’s gas is between Russia and China.” Europe, as usual, is an unfortunate non-entity here.

Russia probably doesn’t like this news one bit, especially given that the prospects are looking stronger for Turkmenistan to get connected to China via pipeline, despite Gazprom’s repeated offers to buy all of the country’s gas at European market rates (similar offer was made to Libya and Azerbaijan).Ironically, leaders of the Shanghai Cooperation Organization (SCO) met in Astana, Kazakhstan to discuss the global economic crisis, calling for the end of monopolies. If Turkmenistan were to develop this massive field and export gas at competitive rates through the Nabucco to Europe, to China, and to Russia, then yes, we would at least be putting an end to one problematic monopoly: Gazprom.I suppose that Putin should have clarified that monopolies are OK so long as they are owned by the Russian government…