Translated material
Ready to bargain
Turkmenistan has completed flaw detection of gas pipelines Central Asia - Center
At a meeting of the government of Turkmenistan, President of Turkmenistan Gurbanguly Berdimuhamedov heard a report from Deputy Prime Minister for the Fuel and Energy Complex Baymurad Khojamukhamedov on the completion of flaw detection of gas pipelines, which, according to the official version, should allow Gazprom and Turkmengaz to return to the conversation about supplies of blue fuel. A meeting of company representatives will take place in the near future, possibly as early as this week. However, it should be noted that a quick resumption of purchases of Turkmen gas by Gazprom is unlikely, despite Ashgabat’s politically correct statements following the recent visit of Russian President Dmitry Medvedev to Turkmenistan.Mr Berdymukhamedov appears keen on slow bargaining with the Kremlin and Gazprom on a wide range of commercial and political issues. And as trump cards he holds new gas pipelines to China and Iran, the progress of preparations for the grand opening of which was reported immediately after the report on the technical condition of the gas transportation system for supplies in the Russian direction. The commissioning ceremony for the pipeline in China is scheduled for December 15, and in Iran for the last ten days of the year. At the same time, we should not forget that negotiations with Moscow, in turn, will be an excellent counterweight to bargaining on the terms of gas supplies with Beijing and Tehran. According to Vremya Novostey, price parameters for transactions with the Chinese CNPC and Iranian NIOC have not yet been determined. The design capacity of the pipeline to the Celestial Empire is up to 40 billion cubic meters per year, to Iran - up to 12 billion cubic meters, in addition to the already existing branch with a capacity of 8 billion cubic meters.
Let us recall that in the first quarter, Gazprom purchased Turkmen gas in full at European prices minus transportation costs (over $300 per thousand cubic meters). In April, prices under long-term contracts of the Russian concern in Europe began to decline, but Ashgabat, as it turned out later, refused to adjust the volume and price of fuel for Gazprom. In addition, the parties did not agree on the development of cooperation, guarantees of gas supplies for the new Caspian gas pipeline with a design capacity on Turkmen territory of up to 30 billion cubic meters. Gazprom reduced gas production, which turned out to be fatal for one of the lines of the existing gas transportation system in Turkmenistan. The explosion not only completely stopped fuel supplies to Gazprom’s portfolio for six months, but also led to a sharp cooling in relations. Ashgabat openly blamed the Russian monopolist for the explosion and actually sabotaged all attempts to reach an agreement on terms commercially acceptable to Moscow, which were made at the level of Gazprom and Deputy Prime Ministers of Russia Viktor Zubkov and Igor Sechin.
As the Vremya Novostei newspaper has already reported, the arrival of President Dmitry Medvedev at the closing ceremony of the Silk Road Rally on the Turkmen shore of the Caspian Sea in mid-September was intended to end the Cold War and return to constructive cooperation in the gas sector. After listening to Mr. Khojamukhamedov’s report, the President of Turkmenistan again, as a week ago, stated that partnership in the energy sector is promising and meets the long-term mutual interests of the two countries. “We will continue to strengthen and develop our relations with Russia, a historically long-standing and strategic partner of Turkmenistan,” the head of state promised. But he immediately added that the commissioning of new gas pipelines to China and Iran “will be another important step in the practical implementation of Turkmenistan’s new energy strategy, which provides for both an increase in the volume of hydrocarbon production and the diversification of energy supplies to world markets.”