Turkmenistan accuses Gazprom of causing pipeline explosion  

Posted by Big Gav in , , ,

The LA Times has an article on some central asian great game play that seems to be driven by Gazprom not wanting to pay for relatively expensive Turkmen gas during a supply glut - Turkmenistan accuses Gazprom of causing pipeline explosion.

Turkmenistan blamed Russia's state natural gas monopoly Friday for a pipeline blast that shut off shipments to Russia — an unusual show of tension that could help Western efforts to buy Turkmen gas directly.

Turkmenistan's Foreign Ministry said in a flurry of statements that Russia's Gazprom decided on short notice to reduce the amount of gas it takes from Turkmenistan. Gazprom's export division gave only one day's warning, which wasn't sufficient time for Turkmenistan to reduce its flow into the pipeline network, the ministry said.

The blast, which occurred late Wednesday, "was caused by a gross unilateral violation by Gazpromexport of the norms and rules of the natural gas sales agreement," the statement said. Another statement said Gazprom's actions were "rash and irresponsible" and put lives at risk.

Gazprom has not commented, but Russian Foreign Minister Sergey Lavrov suggested Gazprom was not at fault. "This accident is purely technical," Lavrov said late Friday, according to Russian news agency RIA-Novosti. "I am counting on the fact that this will all be quickly settled."

But Turkmenistan's accusatory language — and putting the accusations at the diplomatic level — raise new questions about Turkmenistan's willingness to rely on Russia as the main purchaser of its gas.

Russia has aimed to corner the market on Turkmenistan's immense gas reserves, but the country also is being courted vigorously by the West, which wants Turkmenistan to be part of a proposed trans-Caspian route that would feed into the U.S.-and EU-backed Nabucco pipeline, which has yet to get off the ground. However, many analysts are skeptical about Nabucco's prospects because there appears to be insufficient gas for the pipeline.

In 2007, Russia, Kazakhstan and Turkmenistan signed a joint declaration on the construction of a 1,100-mile (1700-kilometer) pipeline along the Caspian Sea shore that would run from Turkmenistan through Kazakhstan and into Russia's network of pipelines to Europe. Gazprom hopes the pipeline will supplement current gas deliveries from Turkmenistan by around 30 billion cubic meters.

Work on building the pipeline has yet to get started, however, and disagreements between Gazprom and Turkmenistan could further stall the project.

Two weeks ago, Turkmen President Gurbanguli Berdymukhamedov was expected to sign a protocol on a second pipeline to Russia during a visit to Russia, but the move fell through for unspecified reasons. That was seen by analysts as a significant disappointment to Gazprom.

Turkmenistan meanwhile, has signed an agreement to sell 40 billion cubic meters of gas a year to China and could be interested in further diversifying its customer base.

The explosion damage to the Turkmen pipeline was not expected to cause major disruptions. And the temporary halt of Turkmen gas could work to Gazprom's advantage. Gazprom's gas output dropped 24 percent in March, and a company senior executive said on Thursday that production would be declining by 10 percent each year within the next five years.

While desperate for cash to boost domestic production, Gazprom has to pay for expensive imports from Turkmenistan which are getting far less attractive as demand in Europe is shrinking. Pumping gas from Turkmenistan is "simply unprofitable," said Dmitry Lukashov from UBS in Moscow.


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