Global Crisis Feeds Uncertainty on Turkmen Gas Price
Global Crisis Feeds Uncertainty on Turkmen Gas Price
NBCentral Asia observers say the failure to agree the price at which Turkmenistan will sell natural gas to Russia next year is a result of ongoing global economic turbulence which has depressed the forecasts for demand.
The gas price was expected to come up during a December 9 visit to Ashgabat by Russian deputy prime minister Viktor Zubkov to attend a meeting of the Russian-Turkmen Inter-Governmental Commission.
However, despite expectations, no agreement was reached on either the price or volumes of gas exports to Russia for 2009.
Zubkov said simply that these issues will be dealt with “in due course”, in other words during future negotiations involving Gazprom, the Russian energy giant that is the main purchaser of Turkmen gas.
Turkmenistan produces about 80 billion cubic metres of gas a year, 20 billion of which are used for domestic consumption and the rest exported. Russia buys about 50 billion cu m a year under the terms of a 25-year contract signed in 2003.
This long-term agreement used to determine the gas price, but more recently the Turkmen authorities have started charging more competitive rates. For the second half of 2008, for example, they are charging 150 US dollars per 1,000 cu m.
It remains unclear whether the price will rise further in 2009, but analysts inside Turkmenistan believe this is inevitable, since the current price does not take extraction and transportation costs into account, not does it reflect current market trends.
However, other experts believe natural gas prices are set to fall in parallel with world oil prices, although they are not predicting that Turkmen gas will dip below the current 150 dollars per 1,000 cu m.
The global financial crisis has had a major impact on European manufacturers, the major consumers of Russian (and hence also Turkmen) gas.
Uncertainty about European demand would explain why Moscow and Ashgabat are finding it hard to decide how much gas Turkmenistan should export in 2009, and at what price.
“Gazprom is not sure what demand will be like in consumer countries, and this has led to a delay in the negotiations,” said Annadurdy Hadjiev, a Turkmen economic analyst based in Bulgaria.
Russia exports about 130 billion cu m of gas a year, made up both of its own production and its Turkmen hydrocarbons.
(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service is resuming, covering only Uzbekistan and Turkmenistan for the moment.)
The gas price was expected to come up during a December 9 visit to Ashgabat by Russian deputy prime minister Viktor Zubkov to attend a meeting of the Russian-Turkmen Inter-Governmental Commission.
However, despite expectations, no agreement was reached on either the price or volumes of gas exports to Russia for 2009.
Zubkov said simply that these issues will be dealt with “in due course”, in other words during future negotiations involving Gazprom, the Russian energy giant that is the main purchaser of Turkmen gas.
Turkmenistan produces about 80 billion cubic metres of gas a year, 20 billion of which are used for domestic consumption and the rest exported. Russia buys about 50 billion cu m a year under the terms of a 25-year contract signed in 2003.
This long-term agreement used to determine the gas price, but more recently the Turkmen authorities have started charging more competitive rates. For the second half of 2008, for example, they are charging 150 US dollars per 1,000 cu m.
It remains unclear whether the price will rise further in 2009, but analysts inside Turkmenistan believe this is inevitable, since the current price does not take extraction and transportation costs into account, not does it reflect current market trends.
However, other experts believe natural gas prices are set to fall in parallel with world oil prices, although they are not predicting that Turkmen gas will dip below the current 150 dollars per 1,000 cu m.
The global financial crisis has had a major impact on European manufacturers, the major consumers of Russian (and hence also Turkmen) gas.
Uncertainty about European demand would explain why Moscow and Ashgabat are finding it hard to decide how much gas Turkmenistan should export in 2009, and at what price.
“Gazprom is not sure what demand will be like in consumer countries, and this has led to a delay in the negotiations,” said Annadurdy Hadjiev, a Turkmen economic analyst based in Bulgaria.
Russia exports about 130 billion cu m of gas a year, made up both of its own production and its Turkmen hydrocarbons.
(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service is resuming, covering only Uzbekistan and Turkmenistan for the moment.)
