China Just Broke Russia's Monopoly On Central-Asian Natural Gas

Turkmen President Gurbanguly Berdymukhammedov called the launch of the new pipeline "a new chronicle in the relations of our countries" that "will stand as a golden page" in their history.

One of the big attractions of the pipeline from Central Asia for China is that it's an overland route. A good amount of the gas that China has started buying lately has come from overseas in the form of LNG [liquefied natural gas], which has to be brought in by tankers

According to plan, the Turkmenistan-China pipeline's full capacity of 40 bcm should be achieved by 2012. And, Turkmenistan and China have already signed preliminary agreements to add another 10 bcm eventually. 

Gazprom, the Russian energy giant,  has contracted to purchase between 50 to 65 bcm annually from Turkmenistan, accounting for about 90% of the Central Asian country's gas exports.

The Turkmenistan-China pipeline is also scheduled to take some gas from Uzbekistan and Kazakhstan to China. Uzbekistan has already said it has contracted to provide 10 bcm to the project. A second section of the pipeline that will extend through Kazakhstan from north of the Aral Sea to China - the Beyneu-Bozoy-Kzylorda-Shymkent pipeline - will provide 10 bcm of Kazakh gas. 

The opening of the new pipeline could also have a ripple effect, as Central Asia's gas-exporting states consider offers to join projects leading west to Europe. The European Union-backed Nabucco gas pipeline aims to carry 31 bcm annually and would be nearly twice as long as the Turkmenistan-China pipeline. So far, however, Central Asian leaders have been hesitant to sign contracts to fill the Nabucco pipeline. Whether these leaders change their minds remains to be seen.