President of Russia Vladimir Putin (center) and President of Kazakhstan Nursultan Nazarbaev (right) at an inter-regional exhibition of commodity producers of the frontier regions of Kazakhstan and Russia
Photo: Ilya Pitalev
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Russian, Kazakh Presidents Hide the Price of Gas
// They almost agree on gas, but not on air defenses
Russian President Vladimir Putin flew to the city of Uralsk, Kazakhstan, yesterday to meet with Kazakh President Nursultan Nazarbaev. They signed an agreement on the establishment of a joint company at the Orenburg. Putin was unable to convince the Kazakh president to modernize his air defenses with Russia's help, however. Kommersant special correspondent Andrey Kolesnikov was there, but the presidents hid the gas price from him.
The two presidents came to Uralsk after an economic forum on the border regions of Russia and Kazakhstan. They negotiated for about an hour and a half on founding a joint venture at the Orenburg gas processing plant and concluding a contract for deliveries and processing of up to 15 billion cubic meters of gas from the Karachaganak gas field. They agreed on that.
According to information received by Kommersant, the presidents discussed other projects as well. Putin insisted that Kazakhstan increase the volume of oil it transports across Russian territory using the Atyrau-Samara pipeline. Nazarbaev has previously refused to alter the 2002 oil transit agreement controlling that volume. This time he promised to do so.
Putin also wanted to talk him out of projects with Turkmenistan and Azerbaijan to lay pipelines on the Caspian Sea floor. After the negotiations, Russian Industry and Energy Minister Viktor Khristenko said that the Orenburg joint venture represents a decision in favor of Russia, to the detriment of Turkmenistan and Azerbaijan.
Nazarbaev stood firm in another issue. Kazakhstan intends to modernize its air defenses. The first step in that process will cost $500-600 million. Putin thinks that Russian industry should undertake the task, since Russia received the exclusive right to it when Kazakhstan signed the agreement on establishing a joint CIS air defense system and joined the Collective Security Treaty Organization.
Nazarbean seems to think otherwise, since he has declared an international tender for the project. Now, Rosoboroneksport is competing with the English DFT Systems, French Thomson, European EADS and American Lockheed Martin.
After the negotiations, the presidents viewed a very well-attended exhibition on the accomplishments of border-area economy and proceeded to the house where Pushkin lived for a year in Uralsk and the presidents were to have their next meeting. There, Nazarbaev told the guests about the achievements of their negotiations. Hen mentioned that the presidents had reached an agreement on the price of the gas for the new enterprise at the Orenburg gas processing plant. That price had not been mentioned yet, however.
Putin interjected that the agreement on the Orenburg plant was “a contribution to the solution of the energy problems of our partners, include those in Western Europe.”
That meeting was short, since the main decisions had been made at the morning's negotiations, and the press conference after the meeting was even shorter. Putin announced that Kazakhstan had decided to locate an international atomic center on its territory that would provide various services, “including enriching uranium.”
When I asked what the price of Kazakh gas would be, Gazprom head Alexey Miller answered, “It could very well be. It could very well be. It could very well be.”
I learned from other sources in the Russian delegation that they do not consider the price of Kazakh gas decided. The Russian and Kazakh presidents meet again at the end of this week.
Andrey Kolesnikov
All the Article in Russian as of Oct. 04, 2006
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