Translated material
Price list from Turkmenbashi
The Ministry of Foreign Affairs of Turkmenistan revealed the content of negotiations with Gazprom
Turkmen Foreign Minister Kurban Atayev yesterday explained the reasons for the unsuccessful outcome of Monday's negotiations between the country's President Saparmurat Niyazov and Gazprom head Alexei Miller. The minister publicly announced that Turkmenistan's appetites had grown to the point of setting the selling price for gas at $100. However, in order to justify the “fairness” of such a price, Ashgabat had to use its favorite method of negotiating with gas buyers - blackmail.“The Turkmen side proposed (“Gazprom.” - Ed. ) to set the price at $100 per thousand cubic meters, which is a completely normal cost of gas. However, the Russian side offered $65,” the Foreign Ministry report quoted Mr. Atayev as saying after a meeting with the representative of the European Parliament, Albert Jan Math. - Turkmenistan categorically refused such a proposal. In this regard, the contract was not signed.” At the same time, the minister threatened Gazprom that if a new contract is not signed within a month and a half, Ashgabat will stop gas supplies.
It is noteworthy that the $100 per thousand cubic meters desired by Ashgabat is a blow primarily to Kyiv. Turkmen gas purchased by Gazprom is supplied only to the Ukrainian market. Moreover, deliveries are made through the Swiss trader RosUkrEnergo and in the absence of relevant intergovernmental agreements in Kyiv with Moscow and Ashgabat. Gazprom resells Turkmen raw materials to RosUkrEnergo, which in turn transits gas to Ukraine and sells it there for $95. If the purchase price increases, as Turkmenbashi demands, the wholesale cost of gas on the Russian-Ukrainian border will increase to at least $130 ., and end consumers will have to buy imported gas for no less than 140-150 dollars.
quot;The negotiating position that our Turkmen colleagues now occupy should not cause any concern in Russia. This will not affect the price of gas for Russian consumers. The gas that Gazprom purchases from Central Asian countries, including Turkmenistan, is sent mainly for export to neighboring countries, and primarily to Ukraine,” Gazprom official representative Sergei Kupriyanov said yesterday.
However, the uncontrolled and unpredictable growth of Mr. Niyazov’s price appetite (there is no reason to doubt that he will not stop at $100) is a big headache for Gazprom. Ukrainian effective demand is already bursting at the seams, and the continued rise in gas prices will only worsen the non-payment crisis in this country. But most importantly, it will further increase the risks associated with a possible gas shortage in Ukraine - unauthorized selection from the export flow and the threat of interruptions in gas supplies to Europe. Therefore, Alexey Miller, ironically, will resist such a sharp increase in the price of Turkmen gas for Ukrainian consumers until the last moment.
At the beginning of last year, Turkmenbashi had already stopped supplies to Gazprom when the Russian concern refused to buy gas at $60 instead of the $44 written in the contract. However, at that time we were talking about insignificant volumes (up to 5 billion cubic meters per year), and the main the volume was purchased by Naftogaz for $58. At the end of December, Alexey Miller hastily went to Ashgabat and contracted 30 billion cubic meters for 2006 at $65 per thousand cubic meters. According to Vremya Novostey, by the end of June, 21.5 billion cubic meters will be selected from this volume. Gazprom will take the remaining gas under the contract until the end of September, which means that by this time it is necessary to conclude a new contract for approximately 12-13 billion cubic meters at a price that suits Turkmenbashi.
As Sergei Kupriyanov stated, “at the negotiations held in Ashgabat, the conditions for the purchase of additional volumes of gas this year, as well as the conditions for gas supplies in 2007 and 2008 under a long-term contract, were actually discussed.” “Negotiations are ongoing,” he noted. “We are completely satisfied with the cooperation with Turkmenistan and intend to develop it.”
The Ukrainian leadership tried to take advantage of the situation of uncertainty in relations between Gazprom and Turkmenbashi. The country's President Viktor Yushchenko called Mr. Niyazov with a proposal to discuss the direct sale of 11 billion cubic meters of gas that will remain after the execution of the current contract with Gazprom. However, the request to receive a delegation led by the Minister of Fuel and Energy Ivan Plachkov was never satisfied. Yesterday, the head of the Ministry of Foreign Affairs of Turkmenistan indirectly confirmed Ashgabat’s unwillingness to work directly with Kyiv. “As for the supply of Turkmen natural gas to Ukraine, currently Ukraine does not have its own pipelines for its transportation from Turkmenistan. Therefore, this issue can be resolved after appropriate agreements between the Ukrainian side and the transit countries (in addition to Russia, Uzbekistan and Kazakhstan. - Ed.),” said Mr. Ataev.