1. Anthony Robinson explains why developing
Kazakhstan’s export arteries is vital
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3. ENERGY
A Kazakh worker
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CHINA TIPS THE BALANCE
Moscow’s hard-nosed tactics have made Central Asian After seeking to buy all the gas on offer from Central Asia,
governments increasingly receptive to Chinese offers of Gazprom suddenly found itself committed to importing more
investment. The benefits have already been impressive. After gas than it could sell to domestic and European customers.
decades of leveraging its sole-buyer status to pay rock-bottom Rather than cut domestic production too sharply, it unilaterally
prices for Central Asian gas, much of it effectively re-sold at curbed its purchases from Central Asia in April, as warmer spring
much higher prices to consumers in Europe or Ukraine, Gazprom weather reinforced the broader decline in demand from mining,
was forced to change tack last year and pay ‘European’ prices metals and other big gas consumers hard hit by the recession.
of up to $150 per thousand cubic metres for Central Asian gas Accustomed to deference from its former Soviet colonies,
delivered to the Russian border. Moscow was offended when Turkmenistan insisted that contracts
At the same time, it stepped up investment in Uzbek and for the construction of a planned new 30 billion cubic metre
Turkmen gas fields, which was much cheaper and easier than export line from Turkmenistan, through Kazakhstan to Russia,
developing its own distant and difficult gas fields beyond the would be awarded by an open international tender process – and
Arctic Circle and the Barents Sea. Moscow also hoped to pre-empt not just handed to Russian companies.
China and the EU by securing the bulk of new supplies. Shortly after announcing this decision, the flow of Turkmen gas
But the strategy of locking in increased volumes of gas from to Russia was interrupted by an explosion at a pumping station
Central Asia has been undermined by the depth of the current near the Turkmen/Uzbek border. The Turkmen authorities blamed
economic recession in Russia and its main export customers in excess pressure that had suddenly built up because Gazprom
Ukraine and Europe. Heavily indebted Gazprom has been hit by had not notified its Central Asian suppliers in advance of its
a double whammy of sharply falling gas sales to Europe, partly decision to reduce demand.
as a result of its New Year cut-off in gas sales to Ukraine, and The contrast with China could not be greater. Beijing forecasts
significantly lower income overall. Russia’s export gas prices economic growth at up to 8 per cent in 2009 and remains
have fallen in line with the global reduction in traded gas prices, committed to securing stable foreign sources of energy and
which are linked to the oil price, albeit with a six-month delay. raw materials to fuel its continuing economic growth over the
next decades. With nearly $2,000
billion of foreign reserves, Beijing
is increasingly perceived as a
source of investment capital, as
well as a growing market.
Despite concern over Chinese
companies’ occasional old-
fashioned disregard for increasingly
tight environmental regulations,
Central Asian governments
welcome Beijing’s proclaimed
policy of mutually beneficial
solutions and respectful
negotiations. It has also been noted
that when Chinese companies
offer to finance and help build
big infrastructure projects such as
pipelines, they get on with the job
with eye-watering speed – unlike
Russian projects, which tend to
drag on for years, as the CPC
pipeline saga illustrates.
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