Turan Research Center

Officials at Russia’s state gas company Gazprom were likely celebrating in early September after signing a long-awaited “legally binding memorandum” with China on construction of the Sila Sibiri-2 or Power of Siberia-2 natural gas pipeline.

For Turkmenistan, however, the deal may mark the death knell for its rival project to supply gas to China. Ashgabat has almost exhausted its options for exporting its vast reserves, with its last remaining hope resting on reviving a 30-year-old vision: the Trans-Caspian Pipeline (TCP).

The Obvious Customer

When Turkmenistan became independent in late 1991, the new country’s leadership was already aware of its vast reserves of natural gas. First President Saparmurat Niyazov said during the early years of independence that Turkmenistan would become a “second Kuwait” and “everyone will drive a Mercedes.”

Turkmenistan holds the world’s fourth largest reserves of natural gas – though the exact amount remains contested.  As the Oxford Institute for Energy Studies noted in its 2024 report, “Official gas reserve claims by Turkmenistan have always exceeded independent evaluations.” While Turkmen authorities have estimated figures as high as 24.3 trillion cubic meters (tcm) in 2011, current estimates from British Petroleum and the nonprofit international association, Cedigaz, place the reserves closer to 13-14 tcm. Yet even this lower estimate  would  be enough to meet the European Union’s entire natural gas needs for some 30 years, based on 2024 consumption levels.

Since the mid-1990s, Western governments and energy companies have shown interest in Turkmen gas as a strategic resource for diversifying Europe’s supply. Central to these ambitions has been the proposed TCP –a 190-mile conduit running beneath the Caspian Sea from Turkmenistan to Azerbaijan. The pipeline is designed to carry up to 30 billion cubic meters (bcm) annually. From there, gas would flow from the South Caucasus and Turkey to European markets.

In 1999, U.S. companies General Electric and Bechtel briefly joined the project’s feasibility study, but both withdrew by mid-2000 due to issues involving the unresolved legal status of the Caspian. The TCP project was resurrected in 2002 when Austria’s OMV, Turkey’s Botas, Hungary’s MOL, Bulgaria’s Bulgargaz, and Romania’s Transgaz formed a consortium to build the Nabucco pipeline – a 2,420-mile corridor stretching from the Georgian-Turkish border to Baumgarten, Austria. While the Nabucco consortium aimed to include gas from several countries, Turkmenistan was intended to be its cornerstone -- and that required the construction of the TCP.

The Nabucco pipeline enjoyed strong backing from the European Union as part of its Southern Gas Corridor initiative. In 2009, two high-profile conferences -- one in Budapest in April, the other in Prague in May -- brought representatives from supplier, transit, and consumer countries to discuss the proposed pipeline. But momentum stalled in 2011 with the emergence of a rival project: the Trans-Anatolian Natural Gas Pipeline (TANAP). This 1,144-mile pipeline aimed to start operations with a 16 bcm annual capacity, with plans to expand to 60 bcm by the 2030s. TANAP targeted the same source countries as Nabucco for supplies. Most importantly, the State Oil Company of the Azerbaijani Republic (SOCAR) held a controlling 58-percent stake in TANAP. By 2013, the Nabucco project fell out of relevance and was eventually shelved.

From 2006 to 2022, Gurbanguly Berdimuhamedov - now Chairman of the Halk Maslahaty, the supreme decision-making body in Turkmenistan – served as Turkmenistan’s president. Though Berdimuhamedov never abandoned the TCP, he consistently favored the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. Only when the legal status of the Caspian Sea neared resolution did Berdiumhamedov begin to refocus attention to the TCP.

At a 2018 summit in Aktau, Kazakhstan, the five Caspian littoral states finally agreed on maritime borders, navigation rules, and environmental protections. The resulting Convention on the Legal Status of the Caspian Sea included a pivotal clause -- Article 14, which states: “Parties may lay trunk submarine pipelines on the bed of the Caspian Sea, on the condition that their projects comply with environmental standards and requirements embodied in international agreements… Submarine cables and pipelines routes shall be determined by agreement with the Party the seabed sector of which is to be crossed by the cable or pipeline.”

That language appeared to clear the way for Azerbaijan and Turkmenistan to construct a gas pipeline connecting their two countries. However, Russia’s interpretation of the agreement insists that all five states must consent to any pipeline crossing the seabed. Both Russia and Iran – holders of the world’s largest and second largest gas reserves, respectively – have opposed the TCP since it was first proposed in the mid-1990s.

Despite these obstacles, the TCP long remained a promising option for Turkmenistan. Europe continued to be a reliable customer, willing to pay premium prices for imported gas. However, from the early years of independence, relations between Turkmenistan’s president, Saparmurat Niyazov, and Azerbaijan’s president, Heydar Aliyev, were strained — largely due to disputes over three Caspian gas and oil fields claimed by both sides. In 2006, the same year Niyazov died and three years after Aliyev’s passing, the Baku-Tbilisi-Erzurum gas pipeline began transporting Azerbaijani gas westward. By then, Turkmenistan was already exporting large volumes of gas to Russia and had just concluded a major deal with China. The urgency to build the TCP had diminished.

Line D: A Stalled Ambition

Turkmenistan currently exports gas to China through three major pipelines. Line A began operating in late 2009 with a capacity of 15 bcm annually. Line B, also with a 15 bcm capacity, followed in 2010, and Line C, with a larger capacity of 25 bcm, came online in 2014. However, the pipelines are not solely reserved for Turkmenistan. These three pipelines traverse Uzbekistan and Kazakhstan on route to China, each of which is allotted 10 bcm per year.

Plans calling for a fourth pipeline network -- Line D – envisioned a route through Uzbekistan, Tajikistan, and Kyrgyzstan, carrying 30 bcm of exclusively Turkmen gas to China. Yet aside from limited construction in Tajikistan in early 2018, the project has seen no substantive progress. Chinese officials occasionally mention Line D, as they did during President Serdar Berdimuhamedov’s China visit in early 2023. President Xi Jinping called natural gas cooperation “the cornerstone of the China-Turkmenistan relationship,” but their joint statement merely expressed an intention “to accelerate construction of Line D and other large joint projects.”

Meanwhile, Russia’s proposed Sila Sibiri-2 pipeline -- expected to ship some 50 bcm of Russian gas annually to China – casts doubt on the future of Line D. Although skeptics note that Russia will need substantial Chinese loans and years of construction to finish the project, the same challenges would apply to Line D.

Other Options: A Pipeline Problem

Turkmenistan’s main obstacle to expanding gas exports is its limited pipeline infrastructure that connects the nation to global markets. The government’s long-standing Delivered At Frontier (DAF) policy means consumers must build pipelines to the Turkmen border. To date, only Iran and China have done so.

Two pipelines connect Turkmenistan to Iran. The Korpeje-Kurdkui pipeline, launched in 1997, spans 125 miles and has a capacity of 8 bcm, though it has never carried that full amount. The Dauletabad-Sarakhs-Khangiran pipeline, which opened in 2010, runs 113 miles and can carry 12 bcm but has similarly never operated at full capacity.

Following the collapse of global gas prices in 2015, Turkmenistan’s economy – heavily reliant on gas, which accounts for about 80 percent of state revenue – began to unravel. For the first time since independence in 1991, the country faced shortages of basic foods like flour, sugar, and cooking oil. In 2016, Turkmenistan demanded Iran pay $1.8 billion for gas delivered in 2007-2008. Tehran refused to pay, calling the demand nine times higher than appropriate. Ashgabat responded by halting gas shipments in early 2017. To date, only small volumes flow to Iran, and these are part of gas swap arrangements involving third countries.

China, by contrast, built the entire pipeline network from Turkmenistan to its own territory with Lines A, B, and C stretching roughly 1,140 miles long and invested in fields that supply gas to the pipelines. As repayment for loans and infrastructure financing, China deducts a portion of the gas it receives. Turkmenistan’s current allotment is 35 bcm, and it has consistently met that quota in recent years. However, China now accounts for nearly about 80 percent of Turkmenistan’s gas exports, leaving Ashgabat dependent on a single buyer.

Since early 2023, Turkmenistan has been selling modest volumes of gas to its eastern neighbor Uzbekistan – about 1.5 to 2 bcm annually. Following a 2024 call Uzbek President Shavkat Mirziyoyev, Halk Maslahaty Chairman Berdimuhamedov said that the two sides reached an agreement to increase Turkmen gas exports to Uzbekistan, however no specific figures were disclosed.

Turkmenistan also supplies 1 to 2 bcm of gas annually to Azerbaijan via a swap deal involving Iran since 2017, an arrangement that has been in place since 2017. Deliveries have varied over the years, with occasional interruptions. Under a similar gas swap deal involving Iran, Turkmenistan started exporting 2 bcm annually to Turkey in March.

Turkmenistan’s gas swap deal with Iraq, would send up to 10 bcm of gas to Baghdad, also via Iran. When it was announced in October 2024, the deal included advance payments and was described by Turkmen officials as “a binding agreement.” However, to date, no gas has yet been delivered. On August 19, an Iraqi media outlet reported that the United States, citing sanctions on Iran, objected to the arrangement. Washington’s concern centered on Iran retaining a portion of the Turkmen gas as a transit fee, prompting Iraqi officials to suspend the plan.

The following day, Turkmen Foreign Minister Rashid Meredov visited Washington for the eleventh round of annual political consultations. While official reports did not mention the swap agreement with Iraq, it likely featured on Meredov’s agenda if U.S. objections are indeed blocking the deal.

In 2024, Turkmenistan and Iran reached an agreement to revive and expand gas exports. Iranian companies agreed to repair and upgrade the two existing pipelines, build three compressor stations in Turkmenistan, and construct a new 78-mile pipeline. The agreement – linked to the Iraq swap -- also envisioned boosting Turkmen gas exports to Iran to 40 bcm annually, with 30 bcm staying in Iran and 10 bcm routed to Iraq.

However, U.S. objections to the Iraq swap deal may extend to Iran’s help in expanding Turkmenistan’s pipeline infrastructure. While Washington did not object to the original construction of the Korpeje-Kurdkui and Dauletabad-Sarakhs-Khangiran pipelines, the Israeli-Iran conflict in June 2025 has further clouded prospects for resuming or increasing Turkmen gas sales to Iran, anytime in the near future.

TAPI: Still a Mirage

The long-proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas remains stalled, nearly 30 years after its conception. Designed to ship 33 bcm annually of Turkmen gas – 5 bcm to Afghanistan, and 14 bcm to both Pakistan and India, the 1,127-mile project is still hampered by security concerns and a lack of financing.

Turkmenistan claimed to have completed its 133-mile section in 2018, but doubts emerged in 2019 over whether any actual pipeline had been constructed inside the country.

There have been two inaugural ceremonies to launch construction of the TAPI pipeline inside Afghanistan. The first took place on February 23, 2018, when the presidents of Turkmenistan and Afghanistan, the Pakistani prime minister, and India's Minister of State for External Affairs gathered in the Turkmen border town of Serhetabat, then briefly crossed into to the western Afghan city of Herat to mark the launch of construction on Afghan soil. A second ceremony followed on September 11, 2024, when Taliban acting prime minister and Chairman Berdimuhamedov inaugurated construction of TAPI at Islim Cheshme border point.

Actual construction of TAPI on Afghan territory finally started in January 2025, and by month’s end, the Taliban governor’s office in Herat claimed 3.7 miles of pipeline had been completed. However, at about that same time, reports emerged that India was losing interest in the project due to renewed concerns about relying on gas shipments that needed to transit Pakistani territory.

Russia: From Buyer to Competitor

Russia was once Turkmenistan’s largest gas customer, purchasing more than 40 bcm annually in 2007 and 2008. But relations soured in 2009 following a pipeline explosion during a pricing dispute with Russia’s Gazprom. After repairs, Gazprom capped purchases at no more than 11 bcm. In following years, Moscow never bought that much gas and in 2016, the Kremlin canceled the agreement entirely.

In 2019, Gazprom began to purchase some 5.5 bcm annually, but when the contract was up for renewal in 2024, both sides declined to extend it. By then, Russia had pivoted from purchasing Central Asian gas to selling Russian gas to Central Asia.

Central Asia Tsentr: Reversed Flows

The Soviet-era Central Asia-Tsentr pipeline network, originally constructed to carry Turkmen, Kazakh and Uzbek gas northward, now runs in reverse. Severe power shortages during the winters of 2021 and 2022 forced Kazakhstan and Uzbekistan to halt exports to Russia and redirect gas for domestic use -- still insufficient to meet the two nation’s demands.

In 2023, Gazprom signed an agreement to sell 2.8 bcm to Uzbekistan, prompting Russia, Kazakhstan and Uzbekistan  to reverse pipeline flows. By 2024, Uzbekistan agreed to import up to 11 bcm, and Kazakhstan bought 3.8 bcm, up from 500 million cubic meters the year before. Turkmenistan, meanwhile, lost not only Russia as a customer, but also the chance to supply two of its immediate neighbors with additional gas.

Turkmenistan’s current annual gas exports – if all contracts are fulfilled – amount to roughly 41 bcm, with China, Uzbekistan, Turkey, and Azerbaijan as buyers. That’s less than what Turkmenistan shipped to Russia alone two decades ago. The only potential new customers for Turkmen gas are in Europe and the TCP may be Turkmenistan’s only hope of finding a new markets and expanding exports.

Russia and Iran continue to oppose the TCP, but their objections lack firm legal grounds. The Caspian Charter states that two adjacent maritime countries can agree on pipeline construction. Citing environmental concerns seems disingenuous as both Kazakhstan and Azerbaijan operate pipelines in the Caspian Sea and Russia and Iran have not objected. In May 2025, Iran announced it would issue licenses for drilling and exploration in its sector of the Caspian Sea for the first time in 30 years. If major deposits are found, Iran will likely build its own pipelines – undermining its opposition to TCP.

While construction of a 30 bcm of Turkmen gas may be unfeasible now, a more modest proposal -- a Trans-Caspian interconnector pipeline that would “ship natural gas from existing offshore production platforms in Turkmenistan to Azerbaijan’s operating offshore platforms” – has gained traction. It would link existing offshore platforms in Turkmenistan to Azerbaijan’s operating platforms, requiring construction of just 48 miles of pipeline, costing an estimated $500-$800 million, and delivering 10-12 bcm annually. Completion could take as little as 24 months.

Turkey has endorsed the plan as a gateway to European markets, and supports future expansion to 30 bcm, potentially giving Turkmenistan political clout in negotiations with Russia and Iran.

Financing Fatigue and Political Will

Another formidable obstacle to the TCP remains: Turkmenistan’s refusal to invest in export infrastructure beyond its borders. Speaking less than two weeks after the Caspian summit in Aktau, Azerbaijani President Ilham Aliyev said the “supplier of the gas should be more interested in the construction of the Trans-Caspian pipeline” and noted that “Azerbaijan as a gas supplier has launched construction of 3,500-kilometer pipeline.” Aliyev has repeated several times that Azerbaijan is ready to transit Turkmen gas to destinations further west but will not finance the TCP itself.

A Closing Window

With global momentum shifting toward renewables and nuclear power, Turkmenistan’s window to monetize its vast gas reserves is narrowing. Gas accounts for about 80 percent of Turkmenistan’s export revenue, making urgency paramount. Europe is the only market actively seeking new supply, and unless Turkmenistan makes a concerted effort, much of its gas may remain stranded underground.

To be sure, Turkmen, Turkish and Azerbaijani officials have been meeting with increasing frequency. But without decisive action, the TCP remains only a blueprint – and Turkmenistan’s gas, a missed opportunity.

Bruce Pannier is a Research Fellow at the Turan Research Center. Before joining the TRC, he was a correspondent covering Central Asia for RFE/RL for over 25 years. He previously wrote Central Asia in Focus and hosted the Majlis podcast.