Russia to Control Gas Out of Central Asia

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By Alexander Vershinin
Associated Press
Sunday, May 13, 2007

TURKMENBASHI, Turkmenistan, May 12 -- Russia announced a deal Saturday to significantly increase the amount of natural gas it moves from Central Asia to Europe, a victory in a growing rivalry with the West for the region's vast energy resources.

Russia and the region's main energy producers, Turkmenistan and Kazakhstan, agreed to build a pipeline from Turkmenistan through Kazakhstan and into Russia's network of pipelines to Europe.

Presidents Vladimir Putin of Russia, Gurbanguly Berdymukhammedov of Turkmenistan and Nursultan Nazarbayev of Kazakhstan also said that, with Uzbekistan, they would upgrade the entire Soviet-built pipeline network that carries Central Asian gas to Russia.

The new agreements are a blow to U.S. and European efforts to build oil and gas pipelines from Central Asia that would cross under the Caspian Sea, avoiding Russia, and connect to Europe through Azerbaijan and Turkey. The deal means that Russia would control most Central Asian energy exports, boosting its role as a major supplier of oil and gas to Europe and strengthening Western fears that Moscow could use its energy clout for political purposes.

Russia supplies a quarter of Europe's gas and is its second-biggest supplier of oil. European fears of excessive energy reliance rose after Moscow briefly halted gas supplies to several former Soviet neighbors this year and last.

Putin sought to assuage such fears. "We take our role in the global energy sector very responsibly," he said. But when asked whether others could join the new pipeline project, he answered with a curt "no."

"It's enough to have three countries," Putin said.

The new pipeline's cost was not announced, but the ITAR-Tass news agency cited a 2003 estimate of around $1 billion. Other details, such as how the costs would be divided among the three nations, were also unavailable.

Putin said construction would begin in mid-2008.

Moscow controls the only existing export routes for gas from Turkmenistan -- the second-biggest gas producer in the former Soviet Union after Russia -- along with the main pipeline for Kazakh oil exports.

Russia bought about 42 billion cubic meters of Turkmen gas last year at $100 per 1,000 cubic meters, well below its $250 price for customers in Europe.


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