How to get attached to the pipe

Next week a Ukrainian delegation led by Minister of Fuel and Energy Ivan Plachkov will visit Turkmenistan. Everything depends on how ready our minister is for these difficult negotiations, which will certainly include the issue of debt repayment, and on whether Alexey Miller, the head of Russia’s Gazprom, who, as usual, beat Ukraine to the punch in Ashghabat, has left him any space for maneuvering.

Of course, Plachkov’s mission has received all possible assistance from Ukrainian president Victor Yushchenko, who in recent days has been in regular contact with his colleague Nursultan Nazarbayev. Without the president’s help it will not be easy for the Ukrainian delegation to purchase the 10-12 billion cubic meters of natural gas urgently required for the next half-year because this year Turkmenistan, whose obvious priority is Russia, is not supplying us with this fuel.

It is possible that the Ukrainian government will have to discuss and approve the country’s deficit gas balance. Last week the government committee on developing the real sector of economy announced it is going to suggest that the Cabinet of Ministers adopt the prospective balance of gas entry and distribution for 2006 with a possible deficit of up to 10.7 billion cubic meters. To make things more precise, let’s say that the author of that prospective balance was none other than the Ministry of Fuel and Energy. Does it disbelieve in the success of its mission in Turkmenistan in advance?

Meanwhile, politicians have been evincing a kind of hysteria when they talk about gas issues. Take, for example, Yulia Tymoshenko’s statement that apparently broadcast Gazprom’s “worries” about filling our underground gas reservoirs for both Ukraine and Europe. Who but the former prime minister and, maybe, the next coalition prime minister should know how nervously Europe reacts to such hysterics? But what can you say when the one and the only Cabinet made of Karelian birch in the country hoves into view?

The gas situation is indeed complicated, and the problem is not that Ukraine will run out of this fuel next winter. With enough financial resources it will not be difficult to purchase it. The problem is that there is practically only one seller at the gas bazaar. He has already rushed to Ashghabat ahead of us and seems to have succeeded in achieving an agreement. Turkmenistan is going to raise the price for him from $65 to $100 per thousand cubic meters, but that doesn’t seem to worry him at all, nor the statement by Gurbanmurad Atayev, Turkmenistan’s Minister of Oil and Gas industry and Mineral Resources, who said that if Gazprom does not sign an appropriate contract for delivery of Turkmenistan’s gas within the next few months, the delivery will be terminated.

Presumably this dispute will be solved to mutual benefit, par for the course at any Oriental bazaar. Ukraine faces a much more sophisticated task. Minister Plachkov stated that “where the delivery of Turkmen natural gas to Ukraine is concerned, today Ukraine does not have any pipelines to transport it from Turkmenistan. Therefore, this issue can be settled after obtaining the necessary agreements between Ukraine and transit countries.”

This is a piece of good advice not to waste any time, but to deal with Russia on all gas issues. But it is not energy dealers who make the decisions there but politicians. That’s why Moscow refuses to ratify the Energy Charter, which should have made its gas pipe more accessible to other exporters, including Turkmenistan.

What should Ukraine expect from its minister’s visit to Turkmenistan? Replying to this question, Serhiy Yermilov, former fuel and energy minister and the current director of the Institute of Ecology and Energy Saving Problems, told The Day:

“I would like to hope that we still have some prospects in Turkmenistan,” he said. “Everything can be solved if there is a will. But if they do things the same way as last year, things will go worse. Starting next year, the price of gas in Ukraine will be $300. That’s why the 100-dollar price tag that is probably awaiting us in Turkmenistan is definitely better. It should be understood that having only one consumer who does what he wants doesn’t do Turkmenistan any good. But the head of our delegation personally doesn’t have any prospects because he doesn’t want them. Rosukrenergo’s interests are his top priority. He is the one that has done everything to make this company the success it is today.”