Uzbek Gas Likely to Keep Flowing

As well as high prices for natural gas next year, Uzbekistan has added in some extra conditions for the Kyrgyz as part of a robust negotiating stance. Yet despite this bad news, analysts polled by NBCentralAsia predict Kyrgyzstan will not suffer disruptions to the supply of imported gas.



On November 23, Uzbekistan announced additional clauses to the price increase it announced last month. From January, as well as 100 US dollars for every 1,000 cubic metres of gas instead of the 55 dollars the Kyrgyz now pay, Tashkent wants a guaranteed amount of water to reach its territory during the irrigation season. The Syr Darya, one of Central Asia’s two great rivers, flows from the Kyrgyz mountains where its waters are controlled by hydroelectric dam schemes. Shortfalls in the amount of water arriving in Uzbekistan would be compensated for in kind with Kyrgyz electricity, for which the Uzbeks would pay 0.9 cents per kilowatt hour, a discount of 0.2 cents on the Kyrgyz export price.



When the Uzbeks first announced the increase in the gas export price at the beginning of October, they made no mention of these extra conditions.



Aizada Toigonbaeva, press secretary for the state supplier Kyrgyzgaz, said a final decision on next year’s purchases would be announced only in December, but there was already a preliminary agreement in place for the purchase of 850 million cu m of gas in 2007, so no disruption in supplies was anticipated. According to Kyrgyzgaz data, that amount equals Kyrgyzstan’s total annual consumption of gas.



Toigonbaeva said Kyrgyz consumers would not find themselves paying the full price increase for gas once the import cost goes up. “Since the population is not in a position to pay, Kyrgyzgaz is considering a price discount,” said Toigonbaeva. She said the wholesale purchase cost of 100 dollars per 1,000 cu m implied a retail price of 130 or 140 dollars but said the actual price would be set by Kyrgyzstan’s anti-monopoly commission.



One possible obstacle to reaching a final agreement on the complex gas-water-electricity trade package the Uzbeks want is that Kyrgyzstan’s Elektricheskie Stantsii, the national power station operator, might object to selling electricity to Tashkent at a loss-making discount rate.



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