PETRONAS, in partnership with XRG, State Enterprise Hazarnebit and State Concern Turkmennebit, has signed a new Production Sharing Contract (PSC) for the Block I gas and condensate fields located offshore Turkmenistan in the Caspian Sea. In conjunction with the PSC, a long-term Gas Sales Agreement (GSA) was concluded with State Concern Turkmengas, strengthening the energy cooperation between international and Turkmen partners.

Under the new agreement, PETRONAS holds a 57% participating interest and will act as the operator of Block I. XRG, a key partner in the deal, has secured a 38% stake, while State Enterprise Hazarnebit holds the remaining 5%.

Block I currently delivers approximately 400 million cubic feet of natural gas per day and is estimated to contain more than 7 trillion cubic feet of natural gas resources. The asset is considered one of Turkmenistan’s most promising offshore gas developments, offering significant long-term value and opportunities for future expansion in production capacity. This move supports Turkmenistan’s strategic goals to diversify its energy exports and ensure a stable energy supply in the region and beyond.

This collaboration is aligned with the broader objective of fostering sustainable growth, driving economic development, and enhancing energy security in Turkmenistan. As global and regional demand for cleaner energy sources continues to rise, the Block I development represents a key opportunity to strengthen international energy partnerships and contribute meaningfully to the energy transition.

Mohd Jukris Abdul Wahab, executive vice president and CEO of Upstream at PETRONAS, highlighted the company’s long-term commitment to Turkmenistan. “As the first international operator in Turkmenistan’s energy sector nearly three decades ago, this milestone reinforces our ongoing commitment to the country and our continued expansion in the upstream sector. We are privileged to support the advancement of Turkmenistan’s energy industry and to build enduring partnerships with XRG, Hazarnebit, Turkmennebit and Turkmengas,” he said.

Mohamed Al Aryani, president of international gas at XRG, noted the strategic importance of the agreement. “This partnership marks a significant milestone in XRG’s global growth strategy and builds on the strengthening bilateral relationship between the UAE and Turkmenistan. It enhances our presence in the Caspian region, expands our resource portfolio, and reflects our ambition to deliver reliable and cleaner energy solutions. Our deepened collaboration with PETRONAS and Turkmen partners helps promote energy security, drive economic development, and create long-term value for all stakeholders,” he said.

PETRONAS has been active in Turkmenistan since 1996 and currently operates Block I, along with the Gas Treatment Plant and Onshore Gas Terminal (GTPOGT) in Kiyanly. The new PSC and GSA reaffirm PETRONAS’ strategic focus on strengthening its upstream portfolio in Central Asia and supporting the region’s role in meeting global energy needs.