Kazaks Seek Higher Fees for Gas Transit

Kazakstan’s plan to raise the fees it charges Russia’s Gazprom for gas passing through its territory should be no cause for alarm, as it is motivated by purely economic factors rather than any political reasons. NBCentralAsia analysts also say the price rise will have little impact either on Gazprom or on European consumers of Central Asian gas.



Kazakstan is currently talking to Gazprom about increasing the transit fee from 1.10 to 1.60 US dollars per 1,000 cubic metres of gas for every 100 kilometres it travels.



Current Kazak-Russian agreements provide for up to 55 billion cubic metres of Turkmen and Uzbek gas to transit Kazakstan on its way to Russia over the next five years. At the 1.60 dollar rate, that would mean Gazprom paying up to 88 million dollars a year in transit fees, 28 million more than it does now.



Energy analysts based in Kazakstan say the transit fee increase reflects rising gas prices, and there is no political subtext.



Eduard Poletaev, editor-in-chief of the Mir Yevrazii journal, says Kazakstan’s own gas industry is so dependent on Gazprom that transit fees are one of the few instruments the country has available to it as it tries to secure a more independent position. He points out that Gazprom already owns much of Central Asia’s gas pipeline network.



Other Kazakstan-based experts say Central Asian gas is not going to become so expensive as to affect sales to Europe – the prime market for the gas transiting Kazakstan.



Kanat Berentaev of the Centre for Public Issues Analysis says that the price increase Kazakstan is asking for will not be a burden for Gazprom, and should not result in an increase in the end price that European consumers are charged. He explained that these customers have already contracted to pay the Russians a fixed price, so Gazprom will soak up the increased purchase cost in its own pretty generous profit margin.



Analysts say that in the long run, Russia is going to find it increasingly difficult to maintain its dominant position in the Central Asian energy sector, whose resources are becoming increasingly important to the European Union. There have been statements from NATO, for example, underlining the need to avoid relying on just one country as an energy source. This will ultimately give Kazakstan more leverage vis-à-vis Moscow.



“Russia has recently been having to compete with both the United States and the European Union over energy projects in Kazakstan,” said an NBCentralAsia political analyst. “But it’s a battle worth fighting, because unless Russia has Kazakstan on side, it cannot be regarded as an energy superpower. So the Kazaks have the leverage to increase transit fees.”



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)