Russ Oil-Gas

June 22, 2006 Kommersant - Turkmenistan has apparently adopted the ultimatum methods of Gazprom to hike gas prices. The Foreign Ministry of the country demanded from Russia's gas monopoly to raise gas prices from $65/ths cu meters to $100/ths cu meters starting from the second half-year. Otherwise, it threatened to stop deliveries to Russia August 1. If Gazprom yields to the price growth, the gas price for Ukraine will go up to between $140/ths cu meters and $150/ths cu meters. But Naftogaz Ukrainy will attempt to cut a direct gas deal next week. Turkmen Foreign Ministry released a statement yesterday, which explained the Monday failure of negotiations between Gazprom CEO Alexey Miller and Turkmen President Saparmurat Niyazov. In Turkmenistan, they view the price of $100/ths cu meters as the normal cost of gas, while Gazprom presses for maintaining previous price of $65/ths cu meters. The exact offer of Ashkhabad to Moscow today is to fix the price at $100 for 2006 to 2008. The annual sales are estimated at 50 bcm, as it is the delivery capacity of Middle Asia-Center gas pipeline. Ukraine buys some portion of Turkmen gas from Russia. It will face the prices of $140/ths cu meters to $150/ths cu meters if Gazprom yields to Turkmen terms. But if the gas monopoly turns down the ultimatum, Turkmenistan may deliver gas to Ukraine directly.