Long dune way

Of course, above-named factor influenced Tashkent position related to the priorities in energy cooperation sphere.

However it could not be left aside that secret irritation which appears in Tashkent from time to time when we speak, for instance, about that "Gasprom" does not fulfills its obligations.

Russia Prime Minister Mikhail Fradkov during his visit to Tashkent received his own share of claims from Uzbekistan. Uzbekistan authorities told him that "Gasprom" talks too much but do small things.

And such moods in Tashkent are being redoubled more and more.

Traditional exhibition "Uzbekistan oil and gas" passed recently in Tashkent showed that irritation of Uzbekistani authorities caused by dominating representation of Russian companies in energy resources development and extraction became clearer. If we look at the front, we could not doubt getting stronger energy cooperation of two countries. Tashkent supported Russian enlargement project of very important for Central Asia pipeline "Middle Asia - Center".

From the other side, by this year Uzbekistan is obliged to deliver through above-named pipeline 13 billion of cubic meters of natural gas. By now nobody cares because of which extraction increase Tashkent is going to fulfill the obligations. Because the export growth has to amount 4 billion of cubic meters as minimum: from 9 billion in 2006 up to 13 billion in 2007.

Many thinks that export growth will be achieved because of gas consumption decrease on local market. In conditions when high density populated Fergana valley in Uzbekistan lacks of gas, and it begins to happen not only here more and more often, such step of Uzbekistani authorities could mean only that Uzbekistan does not have enough liquidity to realize ambitious plans on economy modernization. If there is no choice

Moscow follows a key aim in energy cooperation with Central Asia sphere - to keep control on export flows out of the region. Such a control allows Russian energy monopolies keep their status quo not only on European market but as time goes by hold hegemony in other parts of the world which faces energy hunger.

Therefore the idea of energy alliance is exaggerated by Moscow for so long time and in different variants appears not only on global level, but on inter regional as well.

From one side, Russia tries doing this somehow deduce Iran from sanctions regime hoping for Teheran loyalty towards idea of global energy alliance. From the other side, in CIS frames the idea of single coordination center of countries in energy supplies for international market is lobbied.

Uzbekistan authorities, certainly, want to diversify energy cooperation. Taking into account a Moscow factor, which aims to keep full control on Central Asian energy resources, this seems to be very natural intention. Diversification need is the same that competitiveness on the market. If there is a competition for tenders, it will be possible to choose partners which in financial terms will be more profitable. If there is no competition, you should agree with what is dictated, in particular, Russian energy monopolies.

However once the relations with the West became worse on the question of independent investigation of Andijan events question, Tashkent faced deficit of Western companies offers.

Uzbekistani authorities hardly try to establish closer energy relations with the only one left by now real partner out of other alternatives - with China. By the end of April Uzbekistan state energy company "Uzbekneftegas" reached the agreement with Chinese national oil company CNPC on 530 kilometer piece of pipeline construction with carrying capacity of 30 billion cubic meters of gas a year.

According to Uzbekistan company representatives, this project should fasten the deal realization made in 2006 between China and Turkmenistan rich of gas, on which conditions Ashgabat should supply Beijing by above mentioned gas volume annually starting from 2009.

In 2006 gas extraction in Uzbekistan amounted 62,5 billion cubic meters about 80% of which were for local market. The rest was exported in Russia and neighboring Central Asian countries. Assumed, that gas reserves in Uzbekistan could be bigger if forecasted today.

Generally, Uzbekistan has very strong moods against Russian monopolies. In particular, Chinese export route of "Uzbekheftegas" could be used as push button for Moscow. Evident aim is to make Russian energy giant "Gasprom" pay higher price for gas which it buys from Tashkent. By now "Gasprom" pays USD 100 per 1000 cubic meters of gas which it transfers to Russia then to Europe where Uzbeki gas is sold on market price of USD 220 per 1000 cubic meter or even more.

Besides

China National Petroleum Corporation (CNPC) plans to start in August - September of 2008 Chinese part of gas pipeline through which Turkmeni gas will be transferred to Guan Chou.

The first will be build a part of gas pipeline in Western Xingjian. Planned length of new gas pipeline is 6,5 thousand of kilometers which is twice bigger then length of acting gas pipeline "West-East". Investments to the project will amount USD 10,35 billion. Foreign investments in this gas pipeline construction will not be needed because the central Chinese government will invest enough.

China will get hydrocarbon from Central Asia through this pipeline, but own oil and gas resources in Xingjian the country will keep for next generations. In April 2006 Turkmenistan and China signed an agreement on which China will buy 30 billion of cubic gas meters from Turkmenistan annually.

According to the agreement, CNPC should execute exploring and put in order gas extraction on Turkmenistan territory on Amudarya right shore and by the end of 2008 construct a pipeline to China, start to receive gas from 2009.

While a lobster does not whistle…

Russia seems to be not very much worried about Uzbeki-Chinese deal. They think the time will go by until they start extraction and exploitation of proposed export route if it is realized someday.

"Gasprom" and "Lukoil" are one more Russian energy giants have agreements for exploration works in potential deposit places of energy resources most of which are in fast disappearing Aral sea area of water or close to it.

Fairly speaking, these projects are being realized at a snail's pace. 2006 and the beginning of 2007 Uzbek and Russian officials spent in arguments with each other.

At the beginning of 2007 Tashkent has blamed "Gasprom" in non-fulfillment of its investment obligations; in particular, that Russian company invested its 10 share of USD 300 million which promised to spend on fields exploration projects.

In its turn, Russians complain on obstacles which are caused by Uzbekistan authorities. The visit made in early March by Russian Prime Minister Mikhail Fradkov did not bring progress into disagreements solutions.

There is an impression that Uzbekistani authorities simply drag out. By now Tashkent needs Russia support but at the same time does not want to be economically dependant on Moscow. It is possible that as time goes by the circumstances will change, and official Tashkent could find new partners for its fields or at least create for show a competitiveness which allows more successful bargain with Russian companies.

But analyzing the situation with Uzbekistani energy projects you have not to miss other important circumstances.

In particular, situation with taxation of the sphere, which at the beginning kills every initiative.

In April 2007 Chinese Sinopec was off (with) signed in 2005 bargain for USD 110 millions. As reported, Chinese company rejected the participation in the deal because of too high taxes which were put by Uzbekistan government.

The illustration is provided by http://www.rian.ru