The United States urged Turkmenistan on Tuesday to allow its companies to invest in onshore Turkmen gas deposits including South Iolotan, a giant field seen as a key future source of Caspian energy.



In the Turkmen capital Ashgabat to attend an annual energy conference, U.S. Deputy Assistant Secretary of State George Krol told Reuters U.S. companies were keen to develop Turkmen gas but were allowed only to invest in riskier offshore projects.


"American companies have advanced technology," Krol said in an interview. "U.S. companies would like to invest not only offshore but also in onshore projects including in South Iolotan."


Central Asia, particularly Caspian deposits in Turmenistan, has been at the center of geopolitical rivalry involving the United States, China and Russia since the region gained independence after decades of Soviet rule in the early 1990s.


Turkmenistan, an isolated former Soviet republic, has so far allowed only China's state-owned major China National Petroleum Corp (CNPC) to invest onshore into a gas project linked to a Turkmenistan-China gas pipeline due to open next month.


CNPC, pushing aggressively into thinly populated Central Asia to feed its energy needs, won a license to develop the onshore Bagtyyarlyk deposit two years ago.


South Iolotan, another lucrative onshore project, contains between 4 trillion and 14 trillion cubic meters of gas, according to Britain's Gaffney, Cline and Associates, making it one of the world's five largest deposits.


It is seen as one of the new potential gas suppliers for the EU-backed Nabucco pipeline designed to ease Europe's dependence on Russian gas by connecting Caspian gas with Western markets.


Western companies, eyeing new energy sources in remote places in Turkmenistan as easier deposits become depleted, have urged Turkmenistan's new leadership to allow them to bid for projects like South Iolotan.



"Turkmenistan has so far only offered projects in the service industry, apart from CNPC," Krol said in Russian language remarks. A number of smaller foreign companies are currently investing in costlier offshore Turkmen projects.

Russia, which has so far controlled Turkmen gas exports through gas monopoly Gazprom (GAZP.MM), stopped imports altogether this year following an April pipeline explosion which has escalated into a diplomatic stand off over new supply terms.

That has forced Turkmenistan, its budget bleeding key export revenues due to the row, to seek closer ties with alternative buyers like Iran, China and the West.

Global oil and gas executives have flocked to Turkmenistan this week to attend the conference, an annual event used by foreign players to test the waters as they seek to convince Turkmenistan to open up to more investment.

Russia sent only a handful of mid-level gas officials.





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