Turkmenistan
Fifth-largest gas reserves but 81% flows to China via 2009 pipeline; 2025 Turkey swap deal offers first diversification in years as Line D deepens Beijing dependency.
Turkmenistan holds the world's fifth-largest natural gas reserves and has managed to monetize them in the most concentrated way imaginable: 81% of pipeline exports flow to exactly one customer. China's near-monopoly over Turkmen gas creates stability and vulnerability in equal measure.
The territory that became Turkmenistan was the last Central Asian region to fall under Russian control, conquered only in the 1880s after fierce Turkmen resistance. Soviet development followed the regional pattern: cotton cultivation in irrigated zones, centralized industrial investment in processing, and the discovery of hydrocarbon reserves at Dauletabad and other fields that would later prove transformative.
Independence in 1991 brought the challenge of marketing those reserves. The Soviet-era pipeline network ran through Russia, giving Moscow effective veto power over Turkmen exports. Attempts to build alternative routes—across the Caspian to Azerbaijan, or through Afghanistan to Pakistan and India—repeatedly stalled on regional conflicts, financing gaps, and Russian opposition.
China offered escape from this trap. The Central Asia-China pipeline system, inaugurated in 2009, created direct export capacity bypassing Russia entirely. Three parallel lines now carry 55 billion cubic meters annually through Uzbekistan and Kazakhstan to western China. By 2025, cumulative gas trade had reached 430 billion cubic meters—equivalent to China's entire annual consumption.
The Line D project, currently under construction through Kyrgyzstan and Tajikistan, will add another 30 bcm of capacity. This deepens Chinese dependency rather than diversifying away from it. Yet Turkmenistan has extracted premium pricing: in Q1 2024, Turkmen gas earned $2.4 billion versus Russia's $2 billion, as China negotiated discounts from Moscow that it couldn't extract from Ashgabat.
Diversification attempts are finally materializing. A February 2025 gas swap agreement with Turkey—2 bcm annually via Iran—creates the first non-Chinese export route in years. The TAPI pipeline to Pakistan and India, discussed since the 1990s, remains stalled but not abandoned. Iran offers another potential transit route if sanctions configurations change.
The Galkynysh field demonstrates the concentration: Phase 1 exports 30 bcm to China, Phase 2 adds 25 bcm more for China, Phase 3 would supply TAPI—which doesn't exist. The gas abundance matters less than the pipeline geography that determines where it can flow.
By 2026, Line D construction progress will determine whether Chinese dependency deepens further or alternatives finally emerge. Turkmenistan has proven it can extract value from a monopsony customer—but the customer increasingly controls the relationship. Gas abundance without pipeline diversity means Beijing sets the terms.