Russian business daily Vedomosti reported on Tuesday, June 20, that in the second half of 2006
Russian business daily Vedomosti reported on Tuesday, June 20, that in the second half of 2006 Turkmenistan plans to double the price of its natural gas. Increase in price of Turkmen gas to $110-125 will mean the breakdown of the gas agreement between Russia and Ukraine, because the majority of Central Asian gas goes to Russia?s neighbor.
The prices and volumes of deliveries of Turkmen gas to Russia were discussed at negotiations between chairman of Gazprom Alexei Miller and the President of Turkmenistan Saparmurat Niyazov. The meeting took place on Monday and no agreement was reached. According to the paper?s information, Niyazov announced that the price of Turkmen gas will be increased from $66 per 1,000 cubic meters to $110-125 with the same volumes of deliveries.
If Niyazov insists on his new price, the agreement between Russia?s natural gas monopoly and Ukraine will be in danger of failure. With the new price and transportation expenses factored in Turkmen gas will cost Ukraine at least $140 per 1,000 cubic meters. Meanwhile the Russian-Ukrainian agreement signed in the beginning of 2006 specified a price for Turkmen gas at $95 per 1,000 cubic meters. Although Russia said that the agreement was subject to reconsideration for the second part of the year, it is unlikely that Ukraine will agree to new conditions.
?Ukraine won?t agree to raise the price from $95 because that would mean destruction of the national economy,? presidential advisor Ivan Diyak told Vedomosti.
The paper also reported that in the near future Turkmen president will hold consultations with the representatives of the Russian government, returning then to negotiations with Gazprom. The experts, interviewed by Vedomosti, agree that most likely the Russian officials will convince Turkmenistan not to raise the price this drastically. But even if Niyazov agrees to hold off from upping his gas tariffs, the possibility of him doing so will remain. This means that Russia and Ukraine are likely to once again engage in bitter conflict over gas prices.
