Three's Not a Crowd in Central Asian Gas Deal

The arrival of Russia’s Gazprom to act as middleman between Uzbekistan and Kazakstan will help insulate Astana from price-fixing by Tashkent, according to NBCentralAsia energy analysts.



A deal which the Russian gas giant signed with Uzbekneftegaz and Kazmunaigaz in Tashkent last week commits Gazprom to buying 3.5 billion cubic meters of Uzbek gas per annum and supplying it to southern Kazakstan. The Russians will then get the same amount of gas back from deposits located in the north of Kazakstan.



The agreement will come into force once some supplementary arrangements have been made, but NBCentralAsia energy-watchers see the project being launched as soon as next year.



Energy analysts say the agreement has advantages for all parties concerned. Russia reduces the cost of its gas imports from Uzbekistan by cutting out the long transit through Kazak territory. Uzbekistan gets to sell more gas to Russia.



But it is Kazakstan that should benefit most, by securing a stable supply of fuel to southern regions where gas shortages are common. The Kazaks currently import about 1.6 billion cu m of Uzbek gas annually. The excess amount envisaged in this deal is likely to be used to fuel the Zhambyl power station, which provides electricity to three southern regions of Kazakstan.



NBCentralAsia experts in Kazakstan say that with a powerful intermediary like Gasprom involved in the deal, the Uzbeks will be unable to use gas as leverage against the Kazaks.



The agreement will also have the effect of solidifying Russia’s near-monopoly hold over Central Asian gas, energy analyst Yaroslav Razumov says. Moscow now controls almost all the export routes for Turkmen, Uzbek and Kazak gas. Until a planned pipeline running from Turkmenistan to China comes into being, Russia will maintain a position of strength in the regional gas industry.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)