Identifier
Created
Classification
Origin
09ASHGABAT1533
2009-11-27 12:11:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: GAZPROM TO BUY LESS GAS IN 2010?
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001533
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: DECL: 11/27/2019
TAGS: EPET ECON PGOV EINV BTIO RS TX
SUBJECT: TURKMENISTAN: GAZPROM TO BUY LESS GAS IN 2010?
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001533
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: DECL: 11/27/2019
TAGS: EPET ECON PGOV EINV BTIO RS TX
SUBJECT: TURKMENISTAN: GAZPROM TO BUY LESS GAS IN 2010?
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY. A recent Russian article claimed that
Gazprom would significantly lower the price it would pay for
Turkmen gas, and the quantity it would take, in 2010.
Although neither Gazprom nor the Turkmen government have
commented on the article, the GOTX is preparing for Russia to
buy less gas in 2010. Russian President Medvedov stated in
September that he would return to Turkmenistan by the end of
2009, but now that visit seems doubtful. The GOTX is hoping
that increased volumes to Iran and China will help it weather
the reduction of gas exports to Russia. END SUMMARY.
2. (SBU) On November 24, the Russian newspaper "Vedomosti"
published an article claiming that Gazprom's management had
prepared a forecast of gas imports from Central Asia for
2010-2012. The forecast envisages that Gazprom will purchase
not more than 10.5 billion cubic meters of gas per year from
Turkmenistan between 2010-2012, and the price forecast for
gas imports from Turkmenistan for 2010 is $222 per thousand
cubic meters (tcm) of gas, according to the article. The
lower price and volume are reported to be part of a Gazprom
budget and cost organization program, which was approved by
Gazprom's Board of Directors at a November 24 meeting.
Neither Gazprom nor the Turkmen government have publicly
commented on the article to date.
3. (C) If Gazprom truly intends to decrease it purchase of
Turkmen gas to 10.5 bcm, the 2010 volume would be four times
less than volumes that Gazprom purchased in 2008 and intended
to purchase in 2009 before the gas stalemate. The reported
price of $220 per tcm is also significantly lower than the
price Turkmenistan got from Gazprom in 2009, which was
reportedly $320 per tcm. At the same time, if Turkmenistan
does get $220 per tcm from the Russians in 2010, it would be
higher than the reported price of $170 per tcm that Iran will
pay.
4. (C) If Turkmenistan and Russia enter a deal for 2010,
based on a $220 per tcm price and a 10.5 bcm purchase volume,
then the GOTX would earn about $2.3 billion from gas exports
to Gazprom next year. In contrast, in 2009, Russia would
have paid over $3 billion for gas from January until March
2009, before Russia stopped buying gas in April, if the price
for gas was indeed $320 per tcm. Given that Russia has not
resumed purchases of Turkmen gas since April, the GOTX has
been gearing up for a lower gas price and lower volumes, but
post's contacts at the Turkmen Ministry of Oil and Gas do not
believe that Gazprom would purchase only 10.5 bcm of gas in
2010.
5. (C) The Turkmen government has been silent on Gazprom's
plans so far. Turkmen state media reported on Russian First
Deputy Prime Minister Zubkov's meeting with Berdimuhamedov on
November 26, but did not mention any specifics regarding gas
purchases. The Russian Embassy's Political Counselor Leonid
Sklyarov told Charge that negotiations were still ongoing.
When asked if Russian President Medvedov would come to
Ashgabat in December to open a Russian school and to sign any
deals, Sklyarov suggested that a Medvedev visit in December
was a question mark. Sklyarov alluded to timing difficulties
and mentioned that Medvedov had just been in Turkmenistan in
September.
6. (C) COMMENT. The recent Russian article claiming that
Gazprom will buy only 10.5 bcm of gas and pay $220 per tcm
for gas for 2010 has not been confirmed in Ashgabat. It is
clear, however, that the GOTX expects both the price and
volume of gas sold to Russia to decrease significantly.
Although Turkmenistan is counting on increased exports to
Iran and China over the next few years, the absence of large
ASHGABAT 00001533 002 OF 002
gas purchases from Russia may take a toll on the Turkmen
budget. END COMMENT.
CURRAN
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR EHOUSE
E.O. 12958: DECL: 11/27/2019
TAGS: EPET ECON PGOV EINV BTIO RS TX
SUBJECT: TURKMENISTAN: GAZPROM TO BUY LESS GAS IN 2010?
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY. A recent Russian article claimed that
Gazprom would significantly lower the price it would pay for
Turkmen gas, and the quantity it would take, in 2010.
Although neither Gazprom nor the Turkmen government have
commented on the article, the GOTX is preparing for Russia to
buy less gas in 2010. Russian President Medvedov stated in
September that he would return to Turkmenistan by the end of
2009, but now that visit seems doubtful. The GOTX is hoping
that increased volumes to Iran and China will help it weather
the reduction of gas exports to Russia. END SUMMARY.
2. (SBU) On November 24, the Russian newspaper "Vedomosti"
published an article claiming that Gazprom's management had
prepared a forecast of gas imports from Central Asia for
2010-2012. The forecast envisages that Gazprom will purchase
not more than 10.5 billion cubic meters of gas per year from
Turkmenistan between 2010-2012, and the price forecast for
gas imports from Turkmenistan for 2010 is $222 per thousand
cubic meters (tcm) of gas, according to the article. The
lower price and volume are reported to be part of a Gazprom
budget and cost organization program, which was approved by
Gazprom's Board of Directors at a November 24 meeting.
Neither Gazprom nor the Turkmen government have publicly
commented on the article to date.
3. (C) If Gazprom truly intends to decrease it purchase of
Turkmen gas to 10.5 bcm, the 2010 volume would be four times
less than volumes that Gazprom purchased in 2008 and intended
to purchase in 2009 before the gas stalemate. The reported
price of $220 per tcm is also significantly lower than the
price Turkmenistan got from Gazprom in 2009, which was
reportedly $320 per tcm. At the same time, if Turkmenistan
does get $220 per tcm from the Russians in 2010, it would be
higher than the reported price of $170 per tcm that Iran will
pay.
4. (C) If Turkmenistan and Russia enter a deal for 2010,
based on a $220 per tcm price and a 10.5 bcm purchase volume,
then the GOTX would earn about $2.3 billion from gas exports
to Gazprom next year. In contrast, in 2009, Russia would
have paid over $3 billion for gas from January until March
2009, before Russia stopped buying gas in April, if the price
for gas was indeed $320 per tcm. Given that Russia has not
resumed purchases of Turkmen gas since April, the GOTX has
been gearing up for a lower gas price and lower volumes, but
post's contacts at the Turkmen Ministry of Oil and Gas do not
believe that Gazprom would purchase only 10.5 bcm of gas in
2010.
5. (C) The Turkmen government has been silent on Gazprom's
plans so far. Turkmen state media reported on Russian First
Deputy Prime Minister Zubkov's meeting with Berdimuhamedov on
November 26, but did not mention any specifics regarding gas
purchases. The Russian Embassy's Political Counselor Leonid
Sklyarov told Charge that negotiations were still ongoing.
When asked if Russian President Medvedov would come to
Ashgabat in December to open a Russian school and to sign any
deals, Sklyarov suggested that a Medvedev visit in December
was a question mark. Sklyarov alluded to timing difficulties
and mentioned that Medvedov had just been in Turkmenistan in
September.
6. (C) COMMENT. The recent Russian article claiming that
Gazprom will buy only 10.5 bcm of gas and pay $220 per tcm
for gas for 2010 has not been confirmed in Ashgabat. It is
clear, however, that the GOTX expects both the price and
volume of gas sold to Russia to decrease significantly.
Although Turkmenistan is counting on increased exports to
Iran and China over the next few years, the absence of large
ASHGABAT 00001533 002 OF 002
gas purchases from Russia may take a toll on the Turkmen
budget. END COMMENT.
CURRAN