VZCZCXRO5405
PP RUEHIK
DE RUEHAH #1606/01 3481432
ZNR UUUUU ZZH
P 141432Z DEC 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3900
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5997
RUEHBJ/AMEMBASSY BEIJING 3691
RUEHKO/AMEMBASSY TOKYO 3550
RUEHIT/AMCONSUL ISTANBUL 4239
RUCNDT/USMISSION USUN NEW YORK 1309
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 4178
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 001606 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB; NEA/IR 
ENERGY FOR EKIMOFF/BURPOE/COHEN 
COMMERCE FOR DSTARKS/EHOUSE 
 
E.O. 12958: N/A 
TAGS: EPET PGOV EINV TX IR
SUBJECT: TURKMENISTAN OPENS ITS FIRST COASTAL LPG TERMINAL 
 
ASHGABAT 00001606  001.2 OF 002 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY: On December 9, the Turkmen Government held 
an opening ceremony for a liquefied petroleum gas (LPG) 
terminal with the capacity of 200,000 tons per year built near 
the village of Kiyanly on the Caspian coast.  International 
media outlets incorrectly called it an LNG terminal.  The 
terminal is part of the Turkmen Government's ambitious plans 
to increase LPG production and exports from the Turkmenbashy 
Oil Refinery.  It is the first LPG terminal on the Caspian 
coast and is the first LPG terminal in Turkmenistan that will 
deliver LPG via maritime rather than land transportation.  END 
SUMMARY 
 
¶3.  (SBU) Some international media reported on the terminal 
opening, wrongly calling it a liquefied natural gas (LNG) 
terminal.  The confusion was most likely caused by the fact 
that the translation of the Russian term for "liquefied gas" 
does not account for the differences between LNG and LPG.  The 
new terminal will ship LPG, which is a mixture of propane and 
butane as opposed to natural gas which is mostly methane. 
 
¶4.  (SBU) In 2008, Turkmenistan produced 412,000 tons of LPG 
and has plans to increase the LPG production up to two million 
tons by 2020.  The Turkmenbashy Oil Refinery accounts for 
about 70 percent of the country's LPG production, whereas the 
remaining 30 percent comes from another LPG plant located in 
Nayip, Eastern Turkmenistan.  Since more than 90 percent of 
Turkmenistan's population receives natural gas through a 
network of distribution pipelines, Turkmenistan exports the 
lion's share of its LPG.  Exports go mostly to Iran and 
Afghanistan through railway and truck terminals located in 
Turkmenbashy, Sarakhs, and Serhetabat. 
 
¶5.  (SBU) The Iranian Pars Energy Company, which constructed 
the three onshore LPG terminals in the country, built the new 
terminal according to a contract with the Turkmenbashy Oil 
Refinery signed in 2008.  The terminal is connected to the 
Turkmenbashy Oil Refinery by means of two 26-kilometer 
pipelines.  It has an LPG storage facility with the capacity 
of 3,000 tons and can service LPG tankers with payload 
capacities of up to 3,000 tons.  The terminal is scheduled to 
be adapted to accommodate service ferries carrying railway 
tank trailers.  The Turkmen Government has further plans to 
deepen the seabed near the terminal from five to seven meters, 
in order to service larger ships. 
 
¶6.  (SBU) The Turkmen media did not specify the markets for 
Turkmen LPG exports originating at the Kiyanly terminal. 
Nevertheless, since an Iranian company constructed the 
terminal and Iran has been a traditional consumer of Turkmen 
LPG, it seems plausible that Iran could be the primary 
destination for Turkmen LPG shipped from the Kiyanly terminal. 
 
¶7.  (SBU) It will probably take some time before the Kiyanly 
terminal starts operating at full capacity.  Since it is 
the first LPG terminal on the Caspian coast, there is the 
question of infrastructure needed to transport and off-load 
seaborne LPG shipments.  No information was published about 
either LPG-suitable tankers on the Caspian, nor about 
facilities in neighboring countries capable of off-loading LPG 
from tankers.  Also, Turkmenistan will need to increase its 
production of LPG in order to keep all four of the country's 
terminals busy. 
 
¶8.  (SBU) COMMENT: The Kiyanly LPG terminal has been hailed as 
an important component of the Turkmen Government's program to 
increase LPG production and exports.  If and when Iran, or 
Azerbaijan, builds an LPG import terminal, Kiyanly will play a 
 
ASHGABAT 00001606  002.2 OF 002 
 
 
crucial role in facilitating Turkmen LPG exports to Western 
Iran and could also make Turkmen LPG more competitive in 
Georgian and Armenian markets.  END COMMENT 
 
CURRAN