Energy Row Looms in Central Asia

[Gloria]

From the new World Media Watch up now at http://www.zianet.com/insightanalytical
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2//EurasiaNet.org, US 7/12/06

http://www.eurasianet.org/departments/business/articles/eav071206.shtml



ENERGY ROW LOOMS IN CENTRAL ASIA
Sergei Blagov and Igor Torbakov



Turkmenistan is once again proving to be the wild card of Central Asia’s energy game. In early 2006, Turkmen leader Saparmurat Niyazov expressed readiness to significantly strengthen his country’s energy ties to Russia. But after Niyazov recently demanded a hefty price increase for Turkmen gas, a crisis looms in bilateral relations -- the consequences of which could possibly be felt as far away as Europe.



Niyazov lived up to his mercurial reputation during a late June meeting with Alexei Miller, the head of the Russian conglomerate Gazprom. According to a Turkmen Foreign Ministry statement, Niyazov demanded that Gazprom pay $100 per 1,000 cubic meters (tcm) of Turkmen gas for the second half of 2006, up from $65 per tcm that the Russians have been paying during the first six months of the year. Also in late June, Turkmen officials demanded that Ukraine pay the same $100/tcm price for gas exports.



Miller refused to meet Niyazov’s terms and energy talks between the two countries were suspended. Ukraine has similarly been unable to strike a deal with Ashgabat. Although Gazprom issued a carefully worded statement on the turn of events, Ashgabat’s reaction was unexpectedly strong. On July 3, the Turkmenistani government lashed out at what it described as the "double-faced scheming" of Russia. It also characterized Russia’s energy policies as "dirty deals" by "dogs and monkeys."



Earlier, the Turkmen Foreign Ministry announced that if Moscow declined to meet Ashgabat’s new price, Turkmenistan would suspend natural gas supplies to Russia in September and would redirect exports to China. Such action could cause disruptions in Russian energy supplies to Western Europe.


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