Turkmenistan Cuts into Gazprom's Hoped-for Share of Chinese, Indian Markets ...
22.05.12
Ashgabat continues to flaunt its colossal gas reserves at a Europe that yearns to cast off its reliance on Russian fuel. It is cavalierly stepping up exports to China, the world’s largest energy consumer that Gazprom has been trying to win over for years. And Turkmenistan is also looking to make forays into the emerging gas market of India that Russia is also eyeing up.
“It is rivalry,” said Valery Nesterov, a senior energy analyst at Troika Dialogue. “It is only going to get more strained, particularly in the future. It’s inevitable. The development of the market in relation to energy market players is constantly in flux... The conditions for Russia to expand its exports are becoming tougher because new major gas players like Turkmenistan are emerging.”
And as a recent Turkmenistan-China gas accord showed, Moscow is often powerless to respond. Turkmen President Gurbanguly Berdymukhammedov on November 23 signed a deal with Chinese President Hu Jintao to expand an existing gas accord that will see Turkmenistan export 65 billion cubic meters of gas a year to China “in the near future.” The Turkmen deal flies in the face of ongoing Russian talks with China to export Russian gas (68 bcms a year according to Russian officials in October) that have stalled over pricing. Gazprom reacted to the deal with “alarm,” said Alexander Kokin, a senior oil and gas analyst at UralSib Capital. Kokin estimates that China will need 150 bcms by 2020, some of it provided by LNG from Myanmar. “It’s really a question how the remainder of this market will be divided between Russia and Turkmenistan,” Kokin said. “It stands to reason that the more gas Turkmenistan provides, the less Russian gas will be needed. But the most important thing is that this deal weakens Russia’s position in negotiations with China – it can no longer dictate its terms and will have to cut the price of its gas.”
Source: Oil and Gas Industry Latest News