Turkmen, Russians Divided Over Gas
Sunday, 14 June, 2009
Turkmen, Russians Divided Over Gas
Sunday, 14 June, 2009
As world gas prices have slumped over recent months, Gazprom has indicated that it wants Turkmenistan to agree to a lower price, otherwise purchase volumes will have to be cut.
Gazprom’s deputy board chairman Valery Golubev reiterated this position on June 1, noting that most of the Turkmen gas acquired by his company is earmarked for Ukraine, which has reduced consumption by 50 per cent.
“Turkmen gas was being purchased [by Gazprom] at the same prices as on the European market. It follows that since Europe is no longer buying gas at these prices, we… cannot sell your gas at your prices,” said Golubev.
In April, Gazprom reduced imports of Turkmen gas due to falling market prices. The Turkmen authorities said the reduced flow of gas in the Central Asia-Centre pipeline, which Gazprom owns, was the cause of an explosion which shut down the route.
Once the pipeline had been repaired, Gazprom continued to take a lower volume of Turkmen gas.
Under the terms of a general agreement between the two states, Gazprom is supposed to buy about 50 billion cubic metres of gas a year until 2025.
Some believe the Kremlin is trying to pressure Turkmenistan into abandoning plans to develop alternative export routes which would bypass Russia, just at a time when Ashgabat is becoming more drawn into talks on European energy security. In April, a Turkmen delegation attended a European Union-led meeting in Prague which looked at the Nabucco project, a future pipeline running through Turkey and southeast Europe that would provide a way of getting Caspian gas to market.
The other factor, say analysts, is that the terms of the gas purchase contract are unclear, for example whether Gazprom can cut import volumes if world prices fall below what it has agreed to pay Turkmenistan in any given year.
“No details of the agreement between Russia and Turkmenistan are available,” said Annadurdy Khajiyev, a Turkmen economic analyst based in Bulgaria. “If the agreement does not set out provisions allowing supply volumes and prices to be reduced, then Gazprom has to fulfill [previous] commitments. If it fails to do so, its reputation as a reliable customer will be dented.”
The price agreed for 2009 has not been made public, but it is known to be substantially higher than last year’s. Sources in the state gas corporation Turkmengaz say Gazprom is now paying around 320 US dollars per 1,000 cubic metres, and selling Turkmen gas to European consumers at a mark-up.
Official figures from Gazprom’s export division indicate that it has been selling gas in Europe at between 250 and 300 dollars per 1,000 cu m this year.
Khajiev notes that Gazprom does not have the same kinds of problems with its European consumers, as contracts are based on market prices, depending on actual supply and demand.
From Turkmenistan’s perspective, the Russians are making unreasonable demands.
“Russia is reluctant to move away from the Soviet-era imperialist relationship governing gas,” said a Turkmengaz official on condition of anonymity. “It is always trying to dictate its will. It continues to see itself as owner of the pipeline network, and does not want [President Gurbanguly] Berdymuhammedov to be an independent player.”
Rovshan Ibrahimov, head of international relations at Qafqaz University in Baku, says that Gazprom’s reduction in import volumes will be a blow to Turkmenistan, which is heavily dependent on these export revenues. As a result, he predicts, “In the medium term, one can expect Ashgabat to make concessions to Gazprom.”
(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 has resumed, covering Uzbekistan and Turkmenistan.)
