09/07/2006, 00.00
RUSSIA – TURKMENISTAN
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Turkmenistan raises gas prices by 50 per cent, Russia pays

Russian energy giant Gazprom accepts to pay US$ 100 for 1,000 cubic metres of gas, up from 65. Moscow is vying for monopoly control over energy, looking eastward.

Moscow (AsiaNews/Agencies) – Russian gas giant Gazprom has agreed to pay US$ 100 per 1,000 cubic metres of gas (m3) until the end of 2008, up from the US$ 65 it now pays; otherwise Turkmenistan threatened to cut supplies.

Turkmenistan produces about 60 billion cubic metres (bcm) of natural gas a year, with two thirds of exports going to Gazprom, which then sells most of it to other countries, especially Ukraine.

According to Valery Nesterov, an oil and gas analyst with the Troika Dialog investment bank, the new Turkmen price will almost certainly mean that Ukraine will have to pay at least US$ 135 per 1,000 m3 gas as of January 2006.

Although Russia holds the world's largest reserves of natural gas, it appears to be trying to buy as much from outside so to dictate prices, especially in Europe.

Russian President Vladimir Putin wants his country to restore its superpower status playing the energy card.

In making the announcement about the new price on Tuesday, Turkmen President Saparmurat Niyazov said that Russia and China are his country's two main partners and that his country had no plans for gas pipelines to the West. And whilst the United States and Europe are planning a trans-Caspian gas pipeline, Niyazov wants border disputes between the Caspian nations solved before any work begins.

Russia is maintaining close ties with the Uzbek government, politically isolated since the 2005 Andjian massacre. And Moscow has indicated its willing to support the Tashkent regime should it face a popular revolution like those of Georgia and Ukraine.

The Eurasian Economic Community (EEC) member states—Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan—agreed to admit Uzbekistan into the organization on January 25 at a summit in St Petersburg with Russia expressing its intention to forge closer ties with Uzbekistan because of its extensive uranium-ore reserves.

In 2002 Gazprom and Uzbekneftegaz signed a partnership agreement, and Russia pledged to purchase up to 10 bcm of Uzbek gas each year until 2012. This year Gazprom is planning to buy 9 bcm from Uzbekistan

Uzbekistan currently produces 56 bcm of natural gas a year. Karimov said Gazprom will invest up to US$ 1.5 billion in exploration and development in his country's gas fields and be the only exporter of gas. Currently, the Uzbek government can ill afford to upgrade its oil and gas infrastructure on its own.

On January 27, the Russian giant signed a memorandum of intent with Kyrgyzstan to create a joint venture to explore its vast oil and gas reserves. Gazprom chief Aleksei Miller said his company wants to invest "hundreds of millions of dollars".

Moscow has had less success with Kazakhstan, which is avoiding over-reliance on Russia by focusing on alternative routes like the Atasu-Alashankou oil pipeline to funnel crude to China.

Back in May Kazakh Energy Minister Baktykozha Izmukhambetov said a gas pipeline across the Caspian Sea to Europe could be an option "to diversify hydrocarbon export routes". Still Kazakh President Nurusultan Nazarbayev's visit to Moscow on April 3 reaffirmed Kazakhstan's continued dependence on Russian oil pipelines.

Moscow's gaze has also turned eastward, towards Beijing and Tokyo, both of which want to see a pipeline built linking their markets to Russian supplies.

In Beijing on a state visit, President Putin signed an agreement to build two pipelines to supply China and the Asia Pacific region with 60-80 bcm of gas.

With Gazprom's total gas production flatlined at 550 billion cubic metres a year, and domestic prices held low for political reasons with losses of US$ 1 billion in 2005 alone according to a November 29, 2005, TASS news agency report, profits must come from somewhere, i.e. from exports to the West. For this reason, the Russian giant plans to import around 100 bcm a year from Turkmenistan, Kazakhstan, and Uzbekistan. (PB)

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