Turkmen Price Hike to Affect Regional Gas Market

Turkmen Price Hike to Affect Regional Gas Market

Given Turkmenistan’s success in raising the price of its gas exports to Russia, NBCentralAsia analysts predict that Uzbekistan will soon follow suit, with other Central Asian states paying the cost.



Last week, Turkmenistan reached agreement with Russian gas giant Gazprom for a 50 per cent increase in its export price, from 65 to 100 US dollars per 1,000 cubic metres of gas. During the September 5 signing ceremony, Turkmen president Saparmurat Niyazov announced that “the era of cheap gas is over”.



Analysts say his words will likely be heeded by another major gas exporter in the region, Uzbekistan, whose main customers – Kazakstan, Kyrgyzstan and Tajikistan – may soon be feeling the pinch.



One NBCA energy expert believes that Tashkent will tailor its energy strategies to each of these customers.



The most radical price hikes will most likely be directed at Kyrgyzstan and Tajikistan, because they are almost totally reliant on Uzbek gas.



In addition, Tashkent has in the past shown itself ready to use gas as a counterweight to its own dependence on water resources controlled by Dushanbe and Bishkek.



Kyrgyzstan is already bracing itself for Uzbek gas prices to jump from the present 55 dollars to 100 dollars per 1,000 cu m. The issue could take centre stage when Kyrgyz president Kurmanbek Bakiev visits Tashkent later this month.



Kazakstan finds itself in a much less vulnerable position. Although it makes economic sense for the country to use Uzbek gas to supply some of its southern regions, it has substantial natural gas reserves of its own. And Uzbek president Islam Karimov, fresh from a successful visit to Astana, is unlikely to want to put his newly improved relations with Kazakstan to the test.



Tajikistan is in the worst position, say NBCentralAsia’s analysts, since it has made the least progress in its relations with Uzbekistan over the past few years.



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



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