Turkmenistan was among the fastest growing economies in the world in 2011, reaching 14.7%. And while growth is expected to 'moderate' to nearly 10% in 2012, gas exports have surged to China, while oil production has also ramped up.

"Upstream interest in Turkmenistan's growing gas reserves remains strong, with foreign players, particularly China, eager to gain access to the country's lucrative gas fields," notes a Business Monitor International report. "The energy relationship between Turkmenistan and China continues to strengthen, with continued upgrades to existing long-term supply agreements and investment commitments."

The Central Asian state hopes to supply China around 66 billion cubic metres per year by 2020.

That's just the tip of the iceberg.

Based on new reserve estimates, the International Energy Agency believes Turkmenistan can be a major natural gas player in the world.

The country produced 85 billion cubic metres of natural gas in 1990, which currently stand at 46 bcm due to lack of foreign investment. But the IEA expects output to nearly double to 84 bcm, and 138 bcm by 2035, as the country transforms into a natural gas powerhouse, with supply routes to Asia and Europe.

The country reserves were boosted after a Baker Hughes subsidiary, Gaffney, Cline & Associates, estimated that the South Yolotan gas field contains between 13 trillion cubic metres to 21 trillion cubic metres, second only to Iran's giant South Pars field. Overall, Turkmenistan is now estimated to hold the fourth largest natural gas reserves in the world after Russia, Iran and Qatar.

The country could also pose a threat to Qatar and Algeria in the Middle East, which are key suppliers to emerging Asia and European states.

"Turkmenistan's gas reserves are more than enough for any potential demand over the foreseeable future, whether it be from China, Russia, Iran or Europe," Jim Gillett, Gaffney, Cline & Associates business development manager told Reuters at the time the report was released in 2011.

"The phased development of this field, made possible by the commissioning in 2010 of the Central Asia Gas Pipeline to China, means projected growth in Turkmenistan's gas output from 55 bcm in 2011 to 100 bcm soon after 2020 and around 140 bcm by 2035," said the IEA.

Indeed, much of this will only be possible if the various pipeline projects get under way.

In late 2011, EU negotiated a treaty with Azerbaijan and Turkmenistan to build a Trans Caspian Pipeline System. The 1,060-Bcf pipeline is expected to connect to pipelines reaching Turkey and then to the planned Nabucco pipeline to Europe.

"The EU has engaged in a regular dialogue with Azerbaijan and Turkmenistan, which figure among the key potential gas suppliers for Nabucco, ITGI (Interconnector Turkey- Greece-Italy) and TAP (Trans-Adriatic Pipeline)."

There are other pipeline initiatives either under way or under construction. The Central Asia Center Pipeline (CAC), is the main artery shipping the country's exports to Russia. But while the pipeline capacity stands at 3,530 bcf per year, lack of upgrades has meant the actual shipments are half the capacity.

Other natural gas pipelines include the Korpezhe-Kurti Kui Pipeline and Dauletabad-Khangiran pipeline taking natural gas from Turkmenistan to Iran.

Pipelines reaching China, Pakistan and India are also expected to expand Turkmenistan's rapid production.

While the country's fortunes are clearly tied to natural gas exports, its distance from the main markets of Europe and south and south east Asia means the country is dependent on large complex pipelines that pass through a range of countries that are often at odds with each means success is far from certain.

"Turkmenistan has large amounts of natural gas reserves, but is currently constrained by the lack of available natural gas transportation infrastructure," says the EIA.

But the prize for foreign investors and customers is access to the fourth largest natural gas reserves in the world.

"Most of the gas delivered to Japan, Korea, China and India as LNG, as well as China's imports of gas by pipeline from Turkmenistan, is covered by long-term contracts, with indexation based on crude oil prices and destination clauses (limiting the ability of buyers to divert cargoes to other markets). Spot and short-term supplies have been growing (in part because of the unanticipated surge in Japanese demand following Fukushima), but buyers in the region have traditionally placed strong emphasis on long-term security of supply."

OIL PRODUCTION PLAYS SECOND FIDDLE

Turkmenistan also has 600 million barrels of oil reserves and the country has been steadily raising oil production. Crude output has risen from 110,000 bpd in 1990 to 220,000 bpd in 2010, but the government appears more focused on natural gas.

"Foreign participation in the oil sector will help raise output, but liquids production continues to struggle as attentions increasingly shifts to gas," BMI said in its report.

"In 2011, Turkmenistan revised downwards its targeted production number of 1.35mn barrels per day (b/d) by 2030, a reduction from a previously reported goal of 2.2mn b/d. While oil production will rise to 217,000b/d in 2012, we expect output to peak in 2017 at 377,000 b/d, well below government targets."