Sat, Jan 01, 2005 - Page 6 News List

Turkmenistan warns of gas cut to Ukraine, Russia

AP , MOSCOW

The Central Asian nation of Turk-menistan yesterday said it would shut off natural gas supplies to Russia and Ukraine, but Russia's Gazprom gas giant pledged the cut-off would not affect its customers further downline.

The Turkmen Foreign Ministry had said on Thursday that the interruption in supplies to Russia was due to pipeline repairs and would last until Friday next week. The ministry said that the head of Russia's state-owned natural gas giant Gazprom would be flying to Turkmenistan early this month to sign a new contract.

Alexander Medved, the general director of Gazprom's Gazeksport subsidiary, said yesterday that the cut-off "will not have an impact on Gazprom's fulfillment of its obligations to consumers in Russia and abroad."

He said in particular that Gazprom would continue to supply gas to Ukraine, but stressed that was "on condition that the Ukrainian side fully fulfills its transit obligations."

Turkmenistan also said it would cut off all gas supplies to Ukraine beginning yesterday due to the lack of a contract for this year.

The Turkmen Foreign Ministry said that Ukraine "has been reluctant to hold [talks] over the past few days. Instead, media outlets have circulated unreliable reports saying that such negotiations are in progress.

"As noted earlier, the decision is not politically motivated. The only explanation is that 2005 gas supply contracts have not been signed with Ukrainian companies yet," the ministry said.

The Interfax news agency, citing Gazprom, said gas supplies were to stop at 10am Moscow time. Gazprom's press service said it could not confirm that the supplies had in fact stopped.

Russia could meet its gas needs on its own, but the cheap Turkmen supplies relieve Gazprom of costly investments in natural-gas field exploration and development in Siberia.

Ukraine, however, gets some 45 percent of its natural gas from Turkmenistan and potentially could see an impact on its economy.

Earlier this month, the Turkmen national gas company said it would raise the price of natural gas for Russia and Ukraine from US$44 to US$60 per 1,000m3.

The ministry said later that neither Ukraine's Naftohaz nor Russia's Gazeksport had agreed to the new price and warned of an impending cutoff.

Turkmenistan, the second-largest natural-gas producer in the former Soviet Union after Russia, said the price rise was connected to increased production costs and a major increase in the cost of gas-extraction equipment.

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