Four months after announcing it would slash the amount of gas it buys from Turkmenistan and Uzbekistan, Russian energy behemoth Gazprom has revealed the extent which its imports from Central Asia will fall this year.
On February 3, Vice Chairman Alexander Medvedev told an investment summit in Hong Kong that this year Gazprom will import two-fifths of the 10 billion cubic meters (bcm) it imported from Turkmenistan in 2014; it will buy less than a quarter of the roughly 4.5 bcm it bought from Uzbekistan last year.
Medvedev said the decisions had the blessings of both Central Asian states, while boasting that his company came to the agreements from a position of strength.
“For Gazprom, thanks to investment in extraction and transport infrastructure, there is no technological necessity for the purchase of foreign gas,” Medvedev said in comments picked up by state-run RIA Novosti. “Gazprom is in the situation to guarantee both the domestic demand in any region of the Russian Federation, and the delivery of gas to our customers in Europe, and in the future, Asia, with our own resources.”
The announcement came just hours before Moscow said Foreign Minister Sergei Lavrov would make a rare stopover in Ashgabat.
Moscow’s sanctions-struck energy giant Gazprom has announced it is no longer interested in buying Central Asian gas, leaving Turkmenistan and Uzbekistan dependent on exports to China.
Contractually, Gazprom officials have noted they are locked into obligations to buy from Ashgabat and Tashkent for the short term. But Gazprom is “working to annul these contracts,” Vsevolod Cherepanov, head of Gazprom’s Department for Gas Production, said at the St Petersburg International Gas Forum on October 7. Cherepanov did not explain the reasons for cutting back on purchases in Central Asia, but noted that Gazprom’s domestic production is expected to increase in the coming years.
According to Gazprom’s website, the official line remains that the production and import of “natural gas from Central Asia and the Transcaucasian region is an important element in the formation of [Gazprom’s] resource base, meeting the demands of Russia’s internal market, CIS countries and beyond. The business strategy of Gazprom in Central Asia rests on a strengthening of its position in this region. This will maintain and increase the share of Russian gas provided to its traditional markets in Europe.”
Gazprom’s exit will leave purchases of Central Asian gas an increasingly Chinese pursuit. In the two years prior to the opening of the China-Turkmenistan pipeline, which went into operation in late 2009, Gazprom imported an average of 63.4 billion cubic meters of gas (bcm) from Central Asia annually, over two-thirds of which came from Turkmenistan. In the years since, the company says, the volume going to Russia has shrunk to an average 34.1 bcm annually, less than a third of which is sourced in Turkmenistan.
When Russian state energy giant Gazprom took control of Kyrgyzstan’s gas network last month, the prime minister called the transfer a “historic event.” Gazprom chairman Aleksey Miller promised his company "guarantees a stable gas supply.”
Neither seems very reliable to residents of southern Kyrgyzstan today, the 24th day the region has been without gas.
Four days after the formal transfer ceremony, Uzbekistan cut gas supplies to southern Kyrgyzstan. Residents of Osh, Kyrgyzstan’s second-largest city, complain they have been forced to use expensive electricity or cook over wood or dung stoves. Fortunately, the weather is warm. One resident describes a previous cut-off, during winter, when he used seven candles to boil water to make tea for his children.
Gazprom was meant to end such outages. Under the deal, which the Kyrgyz parliament approved in December, for a symbolic $1 Gazprom snapped up Kyrgyzgaz and its property and gained rent-free use of land any facilities stand on. In exchange it took on Kyrgyzgaz’s estimated $38 million debt and pledged some $600 million to improve Kyrgyzstan’s crumbling gas grid. In the long-term, the Kyrgyz hope Gazprom can streamline energy supplies and ease the dire power shortages the country experiences every winter.
Gazprom, the Russian energy goliath, reportedly continues its shopping spree in Armenia; this time around, setting its eyes on the Caucasus country's power-distribution grid. Such a buy would get Gazprom closer to becoming the main source of light and heat in Armenia, second only to the sun.
If the deal is done, the electricity network will change hands from one Russian company, Inter RAO UES, to another. But then, Gazprom is, of course, not just another Russian company. It is the Kremlin’s magic wand for political clout and foreign policy.
As the main supplier of Armenia's natural gas and security (and possibly electricity), and its main trade partner, Russia, some fear, practically owns the country.
A Gazprom filling station in northern Kyrgyzstan. Kyrgyzstan's parliament has approved the sale of the nation's debt-ridden gas monopoly to the Russian state-run energy giant for $1.
Kyrgyzstan’s parliament voted to pass a controversial deal to sell the national gas company to Russian giant Gazprom for the knockdown price of $1 on December 11, local media reported.
Under the deal Gazprom snaps up the company and its property and gains rent-free use of land any facilities stand on. In exchange it takes on Kyrgyzgaz’s estimated $38 million debt and pledges some $600 million to improve Kyrgyzstan’s crumbling gas grid. That could in the long-term help streamline energy supplies and ease the dire power shortages the country experiences every winter.
Some parliamentarians had opposed the deal, agreed in July, seeing it as tantamount to handing a strategic national asset over to former colonial master Russia for a song, but Kyrgyzgaz CEO Turgunbek Kulmurzayev said there was “no other choice” than to sell to Gazprom, since the company is effectively “bankrupt.”
Kyrgyzstan is in any case doomed to gas dependence: It meets just 2 percent of its gas needs from domestic output and relies on imports from neighbors Kazakhstan and Uzbekistan, leverage that Tashkent sometimes uses to bully Bishkek by cutting off supplies.
It looks like Moscow isn't interested in buying part of Kyrgyzstan’s gas infrastructure. It wants all of it.
After a week of dangerous energy shortages in Kyrgyzstan, which continued to leave thousands of customers in the capital without gas on Friday, Bishkek is finalizing a deal to sell Kyrgyzgaz to Russia’s state-run behemoth, Gazprom, officials say.
The shortages began when neighboring Kazakhstan stopped gas supplies to Kyrgyzstan on December 14, citing the need to supply its own customers. Kyrgyzstan had also constantly defaulted on payments and reportedly owed the Kazakhs tens of millions of dollars. The shut off happened to coincide with a bout of extreme cold – temperatures in Bishkek have hovered around -20 Celsius (-4 Fahrenheit) for the past week – leading some to speculate the shortage was a bargaining ploy. In any case, as more Kyrgyzstanis turned to electricity to cook and heat their homes, their country's aging infrastructure faltered, resulting in mass blackouts.
For years, observers have warned of a crisis like the one currently gripping the country, but politicians have done little more than bicker and postpone solutions – like find ways to cut rampant corruption in the sector and raise energy tariffs to cover basic maintenance.
President Gurbanguly Berdymukhamedov has come out with a second volume of his seminal work Medicinal Plants of Turkmenistan, turkmenistan.ru reports. With this new book, Berdymukhamedov, a trained dentist, doctor of medicine and former health minister, seems to combine a message of paternal concern for public health with promotion of native traditions to evoke a sense of national pride.
The first volume, issued last year, boasted of the achievements of Turkmen medicine over the past 14 years since independence and provided a historical sketch of medicinal plants in Turkmenistan as well as information about their biologically-active components.
The appearance of the glossy two-volume set with pictures and recipes for how to prepare medicines out of plants, leaves, grasses and roots -- published in Turkmen, Russian, and English -- raises the question of whether the Turkmen leader is indulging in yet another self-promotion that verges on the sort of cult of personality for which his predecessor, dictator Saparmurat Niyazov, was infamous. Berdymukhamedov has published books on health, the famous Akhal race horses, and a biography of his grandfather, an injured World War II hero.
While Turkey and Russia plow along with natural gas pipelines north and south of the Black Sea, Azerbaijan, Georgia and Romania have decided that the shortest and fastest distance between two points is a straight line.
Baku, Tbilisi and Bucharest on May 12 set up a company that will build two liquefied natural gas (LNG) terminals on either side of the Black Sea to get Eastern Europe the Russia-free natural gas it reportedly craves.
LNG naysayers point to the project's technical difficulties and to its lack of financing plans to argue that the trio's expectations may be getting the best of them.
Compared with the tangled Nabucco pipeline drama, however, the LNG project partners have little in the way of outstanding political issues. The project's key to success may lie in the old Russian maxim "The fewer people, the more oxygen." ("Меньше народу, больше кислороду.")
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