Turkey and Turkmenistan signed an agreement last month (May) under which Turkey will buy 16 billion m3 of gas each year from Turkmenistan.

Under the terms of the deal, Turkey will begin to take delivery of the gas in 2003. Deliveries will continue for 30 years. However a pipeline has yet to be built through the Caspian Sea, Azerbaijan and Georgia, and financial uncertainties could delay implementation of the gas exportation deal until 2005. Key agreements for pipeline construction have yet to be signed.

Turkmenistan has estimated gas reserves of 4.4 trillion m3. It hopes to sell this to boost its economy. Surplus gas from the deal with Turkey may be sold into European gas markets.