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Gazprom may coordinate Central Asian gas price by July 1

Energy Trade

Gazprom could coordinate the price for Central Asian natural gas which it supplies primarily to Ukraine by July 1, a senior official at the Russian energy giant said on Monday.

Uzbekistan, Turkmenistan and Kazakhstan announced in early March that they would begin exporting their natural gas at European-level prices from 2009. Kazakhstan also warned it could raise tariffs for gas transit via its territory. “We plan to coordinate the price by July 1. In any case this will be done before the year’s end,” Alexander Medvedev, deputy chairman of Gazprom’s Management Committee, told the Association of European Businesses, an organization which promotes the interests of European companies conducting business in and with Russia. Any new deals are likely to entail a gas price hike for Ukraine, which buys Russian-supplied Central Asian gas at $179.5 per 1,000 cubic meters (cu m) in 2008. The average price in Europe currently stands at $370.

A dispute over a gas debt and supply scheme between the two countries earlier this year led to a brief reduction in shipments to Ukraine, sparking concerns among European consumers over possible supply shortfalls similar to those reported at the start of 2006. Ukraine transits about 80% of Russian Europe-bound gas. The other ex-Soviet republic that consumes Central Asian gas supplied by Gazprom at a discounted price is Belarus. Russia ships gas to Belarus at $119 per 1,000 cu m but plans to raise the rate to $128 in the second half of this year. The price for Belarus is among the lowest of the former Soviet states thanks to last year’s deal with Gazprom, which bought 50% in the country’s pipeline monopoly Beltransgaz. The Russian gas monopoly earlier said it would raise the price for the country to the market level in 2011. (rian.ru)

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