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Kyrgyzstan Review, 10 years ago

[30.04.24] Kazakh and Kyrgyz at odds over gas

By Asan Kuanov in Almaty and Svetlana Nikonova in Bishkek
The Kazakh government's proposal to build a new pipeline to secure its gas supplies is a sign it is getting tough on regional energy matters. But many believe the Central Asian states can sort out how they supply each other with energy through negotiation rather than unilateral action.
Southern and eastern parts of Kazakstan currently receive gas from Uzbekistan via a Soviet-era pipeline routed through neighboring Kyrgyzstan for much of its length. For the Kazakh, the problem is that the Kyrgyz energy authorities, desperate for fuel, siphon off some of the gas before it reaches its intended destination.
Now, it seems, Kazakstan has had enough. At a cabinet meeting on April 6, Kazakh Prime Minister Danial Akhmetov told officials to begin planning work for a 142-kilometer pipeline that would cut Kyrgyzstan out of the loop, taking Uzbek gas direct to Kazakstan. The project, he said, would ensure not only the stability of Kazakhstan's gas system, but also its energy security.
The Kyrgyz admit to taking the gas, especially during the cold winter months, but say they try to pay for it.
They view the issue as part of a complex web of regional supply arrangements, saying the Kazakh are often less than reliable in fulfilling their pledge to supply Kyrgyzstan with coal. Kyrgyzstan's Uzbek and Kazakh neighbors are committed to supplying it with combustible fuel to reduce its need to drain its mountain reservoirs to generate hydroelectricity in winter. This should allow water to be saved up for release downstream in time for Uzbekistan and Kazakstan to use it for irrigation in summer.
Observers in Kyrgyzstan point to the large cost of the project and the risk that it would provoke their country into taking a tougher stance on the related coal and water issues. Many believe the Kazakh proposal is no more than political posturing designed to put pressure on the Kyrgyz.
But Akhmetov maintains that if a diplomatic solution fails to materialize, construction will go ahead.
Oil-rich Kazakstan has remained dependent on gas imported from Uzbekistan since the countries were part of the integrated Soviet economy. Kazakhstan's own energy reserves lie in its western regions and, since independence in 1991, it has not developed the infrastructure to transport enough fuel to other parts of the country's vast territory.
As a result, the densely populated southeast, home to the former capital Almaty, continues to rely on imported gas from Uzbekistan.
While the Kyrgyz government, which itself buys gas from Uzbekistan via a separate pipeline, admits to occasionally drawing fuel from the Kazakh pipeline to meet its own needs, it claims that every effort is made to compensate for this financially.
"We sometimes take Kazakh gas without permission but we always try to pay our debts," said Ivan Beloshapka, head of the gas network in northern Kyrgyzstan.
But Tairbek Sarpashev, who heads the Kyrgyz parliament's energy committee, acknowledged that payment is not always prompt, "We wish we could pay on time, but due to financial difficulties, we delay payments."
The Kazakh government claims that Kyrgyzstan currently owes it more than seven million dollars for the gas.
Tulegen Askarov, editor of the Kazakh newspaper Epokha, told IWPR that this debt has to be seen in the wider context of water and coal. As well as Kazakhstan's occasional failure to honor its side of the coal-for-water agreement, things are complicated by the fact that fuel supply arrangements are often in the hands of private companies, which are concerned only with payment rather than broader political relationships.
Sarpashev told IWPR that Kyrgyzstan stands to lose money as well as gas if the Kazakh go ahead with plans. "It was beneficial for Kyrgyzstan that the pipeline went through its territory," he said. "We received the gas at privileged prices and sometimes took gas as payment for transit [fees]."
But Kazakstan too will have to factor in significant costs if the project goes ahead. Besides the actual cost of building the pipeline, there is also the possibility that Kyrgyzstan could retaliate by taking a harder stance on the water and coal deals.
"The Kyrgyz government will demand that the Kazakh side strictly follows its obligations on common energy use," said a Kazakh analyst, who wished to remain anonymous.
As a result, many believe the plan is merely a tactic to scare Kyrgyzstan.
According to Asel Maksutova, a spokeswoman for Kyrgyzgaz, the national Gas Company, which currently manages transit arrangements for the pipeline, "The new gas pipeline will cost at least 140 million dollars". "Why does Kazakstan need to spend this much when, even if we do take the Kazakh gas without permission, we compensate them for it later? The pipeline won't be moved. The problem will be solved by other means."
"The Kazakh aren't going to build a gas pipeline to bypass Kyrgyzstan," agreed Kyrgyz parliamentary deputy Oxana Malevannaya. "They say this to improve their position in bilateral talks. By making threats, they hope to get conditions that are favorable to them."
Akhmetov has left some room for a diplomatic solution, but he told the cabinet meeting that if this route fails, construction should go ahead later this year.
IWPR's Reporting Central Asia No. 281, April 30, 2004

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