EU may be in for a long wait for new sources of pipeline gas from Central Asia

Implications: The EU, which relies on Russia for around 29% of its gas supplies, is keen to develop new sources of supply. The countries of Central Asia (and Turkmenistan in particular) have long been targeted as potential suppliers though there are major obstacles which include lack of alternative infrastructure and questions over the availability of sufficient gas reserves.  Turkmenistan is keen to build stronger relations with the EU though at present most gas exports are sold under long term contracts to Gazprom which has recently agreed to pay market related prices to Turkmenistan - this in turn reduces the potential benefit to Turkmenistan from selling direct to Europe. At the recent meeting Turkmenistan "promised" to supply 10bcm/a to Europe though the practicalities of construcitng new infrastructre on this basis are huge.  Whilst Turkmenistan is likely to continue to develop new supply routes to protect its position the markets of China and maybe India may prove more attractive than Europe.

Analysis: The Nabucco pipeline which is being promoted by OMV, RWE and others and which is intended to link Central Asian and Middle Eastern gas with Europe is still some way from realisation - challenges include securing sufficient reserves, agreeing a route across the Caspian (the status of the Caspian Sea is still unresolved) and the presence of competing projects such as "South Stream" which is being promoted by Gazprom and ENI. 
A technical reserves audit in Turkmenistan currently being undertaken by Gaffney,  Cline & Associates (recently acquired by Baker Hughes Inc) will play a crucial role in determining overall levels of gas reserves that might be available for the various projects that are being promoted.