Gazprom

GAZPROM
www.gazprom.com

Contact Information
16 Nametkina St., 117997
Moscow, Russian Federation, GSP-7
T: +7 495 719 30 01
F: +7 495 719 83 33

Michail Airapetyan, Director
33, Novoarchabelskoe Hwy.,
Ashgabat, Turkmenistan, 744036
T: +993 12 48-91-21
F: +993 12 48-91-21
E-mail: pgvtm@nullbk.ru

History in Turkmenistan
In 1996, Gazprom signed a Memorandum of Understanding with Turkmenrusgaz, Unocal and Delta Oil Company to create the Central Asia Gas Pipeline (CentGas) consortium and construct a natural gas pipeline from Turkmenistan, through Afghanistan and into Pakistan.[i] Gazprom left the consortium in June 1998, Unocal left later that year, and the project came to a halt.

Current Scope of Operations
In 2003, Russia and Turkmenistan agreed to a 25-year Cooperation Agreement regarding the purchase and sale of gas.[ii] This gas is transported from Turkmenistan through Uzbekistan and Kazakhstan, via the Central Asia-Center Pipeline System before linking with Russian gas pipelines. In April 2009, there was an explosion on the fourth branch of the pipeline system, the Dovletabat-Daryalik pipeline, near the border with Uzbekistan. Immediately after the explosion, Turkmenistan’s Foreign Ministry issued statements alleging that the explosion occurred as a result of an impulsive decision by Gazprom to significantly decrease gas flow through the pipeline before technical measures had been taken to ensure that the pipeline would operate safely at reduced capacity.[iii] Gazprom, which had decided to reduce imports from Turkmenistan in response to decreased demand for gas in both Russia and Europe, countered that aging pipeline infrastructure was the cause of the explosion.[iv] While repairs to the ruptured pipeline were completed quickly, Gazprom suspended all gas imports from Turkmenistan indefinitely.[v] Eight months of tense negotiations regarding future gas prices ensued between Turkmenistan and Russia, finally culminating in a decision that Russia would import a lower annual volume of gas and that the prices would “be based on a fluctuating European price formula” rather than a fixed price agreement.[vi] Whereas Gazprom was importing an annual 50bn cubic meters prior to the explosion, the company agreed to purchase a maximum of 30bn annually going forward. Gas exports to Russia were reestablished in January 2010.[vii] However, in April 2010, it was announced that Gazprom would only import 10.5 bn cubic meters from Turkmenistan in 2010 due to continuing low demand.[viii]

In 2007, the governments of Russia, Turkmenistan and Kazakhstan entered into an agreement on constructing the Pre-Caspian gas pipeline from Turkmenistan and Kazakhstan north to Russia. In February 2010, the governments reached further agreement on both the Pre-Caspian pipeline and the trunk line to the East-West gas pipeline.[ix]

In October 2010, Russia’s Deputy Prime Minister Sechin announced that Gazprom and Turkmenistan were discussing the possibility of joining the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.[x] Days later, Turkmenistan’s Foreign Ministry denied that Gazprom was in talks regarding the TAPI project.[xi] In January 2011, Russia’s President Medvedev promised his country’s support for the project to Afghanistan’s President Karzai.[xii]

Please see the dossier on Naftna Industrija Srbije for more details on the operations of this Gazprom Neft subsidiary.

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[i] Chevron, Press Release: Unocal, Gazprom Sign MOU for Turkmenistan Gas Pipeline, 13 Aug. 1996,http://www.chevron.com/chevron/pressreleases/article/

[ii] Gazprom. Gas Purchaseshttp://www.gazprom.com/about/production/central-asia/. Accessed February 14, 2011.

[iii] Daly (2009).

[iv] Socor (15 Sept. 2009).

[v] Socor (30 Jun. 2009).

[vi] IHS Global Insight (2009).

[vii] BBC News, “Turkmenistan Opens New Iran Gas Pipeline,” 6 Jan. 2010,http://news.bbc.co.uk/2/hi/8443787.stm. Accessed March 4, 2011.

[viii] Soldatkin (2010).

[ix] Gazprom, Gas Purchaseshttp://www.gazprom.com/about/production/central-asia/. Accessed February 14, 2011.

[x] RFE/RL, “Gazprom Considers Joining Turkmenistan-to-India Pipeline Project,” 22 Oct. 2010,http://www.rferl.org/content/Gazprom_Considers_Joining_TAPI_Project/2198422.html. Accessed February 15, 2011.

[xi] Upstreamonline.com, “Turkmenistan Denies Gazprom TAPI Pipe Talk,”28 Oct. 2010,http://www.upstreamonline.com/live/article234119.ece. Accessed February 15, 2011.

[xii] New Europe, “Russia Backs TAPI Gas Pipeline,” 30 Jan. 2011, http://www.neurope.eu/article/russia-backs-tapi-gas-pipeline, Accessed February 15, 2011.