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Central Asia: Gas Supplies For Ukraine, Russia May Fall Short

Countries including Russia and Ukraine are relying on Central Asian pipelines for gas supplies next year. But our correspondent Michael Lelyveld says recent estimates suggest that far more gas may be committed for exports than the pipelines can carry.

Boston, 21 December 2000 (RFE/RL) -- Countries that hope to import gas from Central Asia next year will be relying on supplies that may be difficult to deliver.

Last week, the Russian gas trading company Itera warned that Central Asian pipelines will not be able to carry all the gas that importing countries have agreed to buy. Igor Makarov, Itera's president, said Ukraine is likely to be the loser if Turkmenistan tries to fulfill its pledges to both Kyiv and Moscow, the Dow Jones news agency reported.

Makarov estimated that the Central Asian pipelines can only handle 54,000 million cubic meters of gas per year. Ukraine has already agreed to buy 30,000 million cubic meters from Turkmenistan, while Russia is negotiating to import 40,000 million next year.

The total of 70,000 million would leave one of the importing countries short by 16,000 million cubic meters, if Makarov's figures on the pipelines are correct. He reasoned that Ukraine is less likely to get its full share because of its chronic payment problems. Turkmenistan agreed to resume shipments of gas to Ukraine this year, but only with advance payments every week. Itera is handling both the sales to Ukraine and the Turkmen deal with Moscow, as well as Russia's separate arrangement to sell gas to Ukraine.

Makarov is the second official in recent weeks to issue warnings about the pipeline limitations. Last month, the president of the Kazakhstan pipeline company KazTransGaz said that $360 million would be needed to restore the Central Asia-Center gas pipeline system, linking Turkmenistan to both Russia and Ukraine. Uzakbai Karabalin of KazTransGaz said the failing lines are now able to carry only 35,000 million cubic meters of gas per year, about half their previous capacity.

The questions about the pipelines come at a time when Russia and Ukraine are on the verge of a final agreement on Kyiv's debts for Russian gas and future supplies. The outcome is supposed to assure Ukraine of dependable gas deliveries and bring a permanent end to its past practice of diverting gas from pipelines to Western European customers.

But if the lower estimate of pipeline capacity from Central Asia is accurate, it would make the shortfall in supplies to either Russia or Ukraine twice as large as Itera has predicted. While Russia is a huge gas producer, it has come to rely increasingly on imports from Turkmenistan to meet its export commitments. A shortfall of 35,000 million cubic meters could be serious, amounting to more than one-quarter of Russian exports to Europe this year.

Kazakhstan has apparently been under some pressure over its capacity estimates. Last week, Kazakhstan's Intergas-Central Asia company, an affiliate of KazTransGaz, signed an agreement with Itera for gas transit next year totaling 133,000 million cubic meters, far more than either company previously said the system would be able to carry. To all appearances, the numbers do not add up.

According to the Russian news agency Interfax, Russia has been given 90,000 million cubic meters of capacity, with another 40,000 million allowed for Turkmenistan and 3,000 million for Uzbekistan. The Russian quota alone is nearly three times as much as KazTransGaz said the Central Asia-Center system could handle only one month before. Kazakhstan's total gas transit, including for internal use, is expected to reach 113,000 million cubic meters this year.

The president of Intergas-Central Asia, Nurgali Ashimov, explained that an unused section of the smaller Bukhara-Ural pipeline system from Uzbekistan would also be pressed into service to meet next year's demand. But it is unknown whether the line through Kazakhstan is in any better shape than the Central Asia-Center system.

It is also hard to say whether any of the exports are being counted twice. Both Turkmenistan and Russia plan to supply gas to Ukraine. At the same time, Russia plans to buy gas from Turkmenistan next year. Since Turkmen gas can only reach Ukraine through Kazakhstan and Russia, it is possible that officials are double-counting the same gas and setting quotas that will never be used.

Questions have also been raised about Turkmenistan's ability to increase its exports so dramatically. If the country were to meet all the commitments and demands for gas from Russia, Ukraine and Iran, it would have to nearly triple its exports in 2001.

The outcome of these maneuvers is hard to predict. On the one hand, Ukraine could receive enough gas if its dispute with Russia over transit is solved, while Turkmenistan may benefit from exports to both countries. But if the earlier Russian and Kazakh estimates about the pipelines are correct, none of the plans may be fulfilled next year.