Translated material
"Best conditions"
Alexey Miller did not meet with the President of Turkmenistan
The first visit of Gazprom head Alexey Miller to Ashgabat this year did not bring any new agreements. Moreover, it could be considered a failure from a diplomatic point of view. For the first time in a long time, the head of the Russian gas monopolist was not received by President of Turkmenistan Gurbanguly Berdimuhamedov, who is the only decision-maker on gas issues. A representative of the Russian concern claims that the meeting with Deputy Prime Minister Tachberdy Tagiyev was due to the preliminary nature of negotiations on gas prices since 2009 and for the long term.Most likely, the Turkmen leader, who in recent days has been actively flirting with alternative gas buyers, decided not to show any special favor to visitors from Russia. On the other hand, the Gazprom delegation arrived in the Turkmen capital from Baku, where it dealt a sensitive blow to opponents in the struggle for control over Caspian gas resources, which means it has already ensured a positive effect from the blitz trip to two Caspian states. Let us recall that the day before, Alexey Miller proposed to President Ilham Aliyev to purchase gas from Azerbaijan at market prices based on existing Gazprom contracts in Europe. And thereby put other potential buyers in a difficult position, obliging them to offer Baku no worse conditions, which significantly weakens the attractiveness of routes alternative to Russia for supplying Caspian gas to the EU.
Gurbanguly Berdimuhamedov is expected at the end of the week in St. Petersburg for an informal CIS summit. There, according to Vremya Novostei sources, a bilateral meeting of the presidents of Russia and Turkmenistan is planned, during which it will obviously not be possible to avoid the topic of gas cooperation.
At the negotiations in Ashgabat, as Gazprom reported, it was noted that the parties were completely satisfied with the results of work on the basis of a long-term contract for the purchase of Turkmen gas. “Turkmenistan is a strategic, time-tested partner of Gazprom in matters of ensuring energy security and reliable gas supplies,” the concern’s press service quotes Mr. Miller. -- The closest interaction between Gazprom and gas industry enterprises of Turkmenistan is historically predetermined and will develop progressively. It is absolutely obvious that it is Gazprom that can provide the best conditions for long-term mutually beneficial cooperation for Turkmenistan.”
The best terms mean the Russian company's willingness to pay a price at the Turkmen border calculated based on the cost of gas for Gazprom's customers in the EU (less transport costs and the usual profit margin). As a source close to the negotiations explained to Vremya Novostey, yesterday they discussed a formula according to which the price would be determined on a long-term basis, as well as the base price on January 1, 2009. Now negotiations will continue at the level of deputy chairman of the board Valery Golubev and his colleagues and Turkmengaz.
Ashgabat did not comment at all on Mr. Miller’s arrival (there was not even a message about the very fact of the meeting with the Gazprom delegation). This is further evidence that Mr. Berdymukhamedov now really does not want to confirm his commitment to agreements with Russia. Just a week ago, he signed a memorandum with European Commissioner for Energy Andris Piebalgs and went to Azerbaijan to discuss, among other things, the Trans-Caspian gas pipeline. And at the end of last week, he received a high-ranking diplomat from Washington, Assistant Secretary of State Richard Boucher, who convinced the Turkmen leader of the need to diversify routes. In addition, over the weekend, negotiations on gas prices took place in Ashgabat with representatives of India and Pakistan as part of technical groups to prepare the Trans-Afghan gas pipeline project. At the same time, the Turkmen leader understands perfectly well that Gazprom has actually already made its best offer, agreeing to buy gas at European prices. Therefore, there are virtually no prospects for further bargaining on a large scale with Moscow. The same cannot be said about other counterparties.
Gazprom purchases 42-44 billion cubic meters of gas per year from Turkmenistan. In the first half of the year, the price is $130 per thousand cubic meters, and from July 1, according to agreements, it will increase by $20. Turkmenistan, Uzbekistan and Kazakhstan expressed a consolidated position that starting next year they are ready to sell gas at European prices, and received agreement in principle Russian concern. However, substantive negotiations on this issue are just beginning.
Baku “has a normal attitude and evaluates well the Russian side’s offer to purchase Azerbaijani gas” at market prices on the basis of a long-term agreement, SOCAR President Rovnag Abdullayev said yesterday, commenting on the meeting between Alexey Miller and Ilham Aliyev. “Russia would like to buy as much natural gas as possible from Azerbaijan,” he noted. At the same time, he did not answer the question about what gas price was discussed at the negotiations in Baku, emphasizing that it now exceeds $400 per thousand cubic meters on the world market. “In general, Azerbaijan is now receiving many requests for the purchase of gas, and not only from Russia, but also from Iran, Turkey, Israel, and EU countries. We are looking for optimal ways to sell our gas on favorable commercial terms, holding discussions and negotiations with a number of countries for this purpose,” said Mr. Abdullaev. According to the president of SOCAR, in the near future up to 20 billion cubic meters of gas will be produced at the Shah Deniz field. "TIME FOR NEWS"