Encouraged by the success of the gas price talks between Russia’s gas monopoly Gazprom and its counterparts from Kazakhstan, Turkmenistan and Uzbekistan, Kazakhstan’s national oil and gas company KazMunayGaz intends to increase the price of its gas for Gazprom by up to 70% in 2009, the company said in a press release posted on its website on 17 March.

“Uzakbay Karabalin has noted that the price of Kazakh gas sold to Gazprom may go up by 60-70% from January 2009, noting that Gazprom is now paying about $180 per 1,000 cu. m. of Karachaganak gas,” the press release cited the company’s head.

“We should be paid the maximum price for gas, which is the European price,” Mr Karabalin was quoted as saying.

The current European price of gas is $330 per 1,000 cu. m. Kazakhstan now exports about 8bn cu. m. of gas a year.

KazMunayGaz’s latest statement confirms the results of the Moscow talks between Gazprom and the national oil and gas companies of Kazakhstan, Turkmenistan and Uzbekistan held on 11 March that the price of Central Asian gas would reach the European levels from 2009.

Gazprom has a monopoly over Central Asian gas exports to Europe and has long been in a position to impose its terms on the Central Asian suppliers. However, the united stance of the Central Asian countries seems to weaken Gazprom’s grip on Central Asian gas supplies. Gazprom’s concessions can also be explained by its fear of pushing the Central Asian countries too close to the West, forcing them to agree to consider alternative exports routes, for example, a trans-Caspian undersea pipeline. On the other hand, there are no grounds to suggest that the Russian company will suffer much from the latest developments, because this will most likely mean that it will shift the burden onto the end users, for instance, Ukraine and EU countries.