Turkmenistan's natural gas industry is acting up these days—and with good reason. Not only is the Central Asian country looking to increase short-term export gas prices, it also supports construction of a pipeline that could yield new markets in South Asia.
To extract higher prices from Russia and Ukraine in December, Turkmenistan stopped their supplies of gas. At a press conference early in January, Turkmen President Saparmurat Niyazov said his country halted deliveries at noon Dec. 31. By midnight, pipeline pressure was nearly zero.
"Ukraine felt this on Jan. 1-2, and on the third they came here straight away and solved the issue," Niyazov said.
New contract
Under a new contract signed on Jan. 3, Ukrainian national oil and gas company Naftohaz Ukrayiny will buy gas from Turkmenneftegaz for $58/1,000 cu m, up from $44/1,000 cu m in 2004.
Russia's natural gas monopoly OAO Gazprom, which has more leverage than Ukraine, refused to pay higher prices, referring to an agreement signed in 2003 under which Turkmenistan agreed to export gas to Russia in 2004-06 for $44/1,000 cu m. But Russia made concessions.
In Ashgabat on Jan. 28, President Vladimir Putin's personal representative for international energy cooperation, Igor Yusufov, said Russia would expand cooperation with Turkmenistan's hydrocarbons industy.
"We are interested in the projects on value-added oil refining and petrochemicals that are being implemented in Turkmenistan," Yusufov said.
Turkmenistan's natural gas is important to Russia, especially at cheaper rates.
Under the agreement signed in April 2003 Turkmenistan is committed to delivering almost its entire projected gas output to Russia from 2009 onward.
Gazprom intends to use those volumes partly to supply certain regions of Russia, partly to resell to Ukraine, and partly to meet Gazprom's own commitments to European Union countries.
Those plans could be upset by the higher rates Turkmenistan is demanding.
Russian industry estimates suggest that the Asia-Pacific region's demand for natural gas could rise from 370 billion cu m in 2005 to 651 billion cu m in 2020. By 2020, Russia aims at exporting up to 38 billion cu m of gas to the Asia-Pacific, mainly China, Japan, and South Korea, including reexport from Central Asia.
But Turkmenistan has ideas of its own there, too, doubtless to Russia's chagrin.
No mention
On Jan. 17, the Turkmen government hailed the feasibility of the so-called Turkmenistan-Afghanistan-Pakistan-India gas pipeline, making no mention of Russia in the deal.
In a statement, Ashgabat said the study "would help to accelerate the start of implementation of the project of the 1,680-km trans-Afghan gas pipeline, starting from the point of supply of gas in Turkmenistan up to the Fazilka settlement on the border of Pakistan and India, with the possibility of the further supply of Turkmen natural gas to the Indian markets."
Perhaps Turkmenistan is acting up these days because it finally has seen the light at the end of the pipeline.
