Sun, Jan 22, 2006 - Page 11 News List

Gazprom agrees to pay Uzbekistan 25% more for gas

AGENCIES , TASHKENT AND MOSCOW

Russia's natural gas monopoly Gazprom has agreed to pay 25 percent more for natural gas from Uzbekistan, an official said yesterday.

Gazprom chief Alexei Miller agreed to the price hike on Friday during a visit to the Uzbek capital, Tashkent, said an official from the Uzbek state energy company Uzbekneftegaz, who spoke on condition of anonymity because he is not authorized to talk to the press.

He said the price increased by a quarter to US$60 per 1,000 cubic meters.

Uzbek state media reported that Miller met with Uzbek President Islam Karimov and Uzbekneftegaz chairman Abdusalom Azizov to negotiate the deal. The results of the talks weren't reported.

Last year, Gazprom had planned to buy 8 billion cubic meters of Uzbek natural gas.

Russian oil and gas companies have recently stepped up activity in Uzbekistan as the ex-Soviet republic's authoritarian president has edged closer to Russia, irritated by Western criticism of a brutal crackdown on mass protests in the eastern city of Andijan last year.

Uzbekneftegaz and Gazprom plan to strike a US$1 billion deal this year to explore prospective natural gas deposits in western Uzbekistan. Gazprom also intends to invest in the renovation of the Soviet-built gas pipeline system that makes Uzbekistan a focal point of gas imports from resource-rich Central Asia.

Meanwhile Ukraine said on Friday that winter cold had forced it to tap more Russian gas from pipelines heading west across its territory, threatening further shortages for European customers of Russian giant Gazprom.

With temperatures well below minus 20?C in Moscow, Kiev and Riga, and an even deeper freeze in Gazprom's production heartland, the gas firm's ability to keep all its customers warm has been tested.

And icy air from Russia is set to sweep over northwest Europe next week, increasing demand for heating fuel.

Gazprom says it is pumping gas at full capacity and meeting its contractual obligations.

Ukraine's Fuel and Energy Minister Ivan Plachkov said that Gazprom had agreed that Ukraine takes extra gas and reduce transit to Europe by 60 million cubic meters a day, up from the previous 40 million cubic meters.

"With the agreement of our Russian colleagues, volumes of Russian gas supplies for exports were cut to 325.4 million cubic meters a day from 385 million, by 60 million cubic meters a day," Plachkov told a government meeting.

But he said Gazprom was covering this amount with gas from its reserves in storage in Western Europe. Temperatures in Kiev dipped to minus 27?C.

Gazprom had already briefly reduced supplies to Europe in early January due to a contract dispute with Ukraine.

A second cut in just a month could further damage Gazprom's reputation as a reliable supplier, which many EU states had already questioned during its stand-off with Ukraine.

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