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Economy
02/09/2008
Russia, Uzbekistan to build gas pipe, update price formula
Analysts say the planned pipeline to be linked to Russia will allow Moscow to maintain its monopoly on Central Asian gas exports to Europe and help bolster its influence in the region.
"We have reached an agreement to start joint practical work to build a new gas pipeline system in Uzbekistan to meet the growing export potential of Turkmenistan and Uzbekistan," Vladimir Putin told reporters after talks with President Islam Karimov.
The new pipeline and the modernization of the 1974 Central Asia-Center pipeline network will raise combined Uzbek-Turkmen exports from the current 45 billion cubic meters to 80-90 billion cu m a year.
Russia, Uzbekistan and Turkmenistan agreed on the projects in May, delivering a blow to a rival Western-backed project to build a trans-Caspian pipeline bypassing Russia, currently the sole re-exporter of Turkmen gas. The new pipeline will run along the Caspian Sea’s eastern coast to Europe via Russia’s pipeline network.
Putin also said Russia and Uzbekistan have agreed to switch to a European pricing formula for the purchases of Uzbek gas. The price issue had earlier prevented the countries from finalizing the pipeline deal.
Uzbekistan, Turkmenistan and Kazakhstan said in March they would sell gas to Russia at European-level prices in 2009.
The head of Russian gas monopoly Gazprom, Alexei Miller, said in July he expected Central Asian producers to double their prices in 2009.
Russia currently pays $160 per 1,000 cu m of Uzbek gas and $150 for gas from Turkmenistan. The formula to be agreed on will set the prices until 2028.
Putin’s visit to Uzbekistan came soon after Russian President Dmitry Medvedev’s attempt to secure Central Asian support for Moscow’s recognition of Georgia’s rebel regions.
Russia’s four ex-Soviet partners in the Shanghai Cooperation Organization - Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan - voiced support for Russia’s actions in Georgia at Thursday’s summit in Dushanbe, but stopped short of backing recognition of Abkhazia and South Ossetia as independent states.
Uzbekistan has moved to improve ties with the West, which it severed in 2005 over strong Western criticism of its brutal crackdown on the Andijan protests.
Last Thursday, Uzbekistan’s defense minister received a senior U.S. military official, raising suspicions in Moscow that Tashkent is considering reinstating a U.S. airbase in the country.
"We have reached an agreement to start joint practical work to build a new gas pipeline system in Uzbekistan to meet the growing export potential of Turkmenistan and Uzbekistan," Vladimir Putin told reporters after talks with President Islam Karimov.
The new pipeline and the modernization of the 1974 Central Asia-Center pipeline network will raise combined Uzbek-Turkmen exports from the current 45 billion cubic meters to 80-90 billion cu m a year.
Russia, Uzbekistan and Turkmenistan agreed on the projects in May, delivering a blow to a rival Western-backed project to build a trans-Caspian pipeline bypassing Russia, currently the sole re-exporter of Turkmen gas. The new pipeline will run along the Caspian Sea’s eastern coast to Europe via Russia’s pipeline network.
Putin also said Russia and Uzbekistan have agreed to switch to a European pricing formula for the purchases of Uzbek gas. The price issue had earlier prevented the countries from finalizing the pipeline deal.
Uzbekistan, Turkmenistan and Kazakhstan said in March they would sell gas to Russia at European-level prices in 2009.
The head of Russian gas monopoly Gazprom, Alexei Miller, said in July he expected Central Asian producers to double their prices in 2009.
Russia currently pays $160 per 1,000 cu m of Uzbek gas and $150 for gas from Turkmenistan. The formula to be agreed on will set the prices until 2028.
Putin’s visit to Uzbekistan came soon after Russian President Dmitry Medvedev’s attempt to secure Central Asian support for Moscow’s recognition of Georgia’s rebel regions.
Russia’s four ex-Soviet partners in the Shanghai Cooperation Organization - Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan - voiced support for Russia’s actions in Georgia at Thursday’s summit in Dushanbe, but stopped short of backing recognition of Abkhazia and South Ossetia as independent states.
Uzbekistan has moved to improve ties with the West, which it severed in 2005 over strong Western criticism of its brutal crackdown on the Andijan protests.
Last Thursday, Uzbekistan’s defense minister received a senior U.S. military official, raising suspicions in Moscow that Tashkent is considering reinstating a U.S. airbase in the country.
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