TURKMEN-UKRAINIAN GAS DEAL COLLAPSES.

President Saparmurat Niazov confirmed on April 21 that Turkmenistan had recently stopped gas deliveries to Ukraine, and explained why. Pursuant to Niazov’s December 1998 agreement with Ukrainian President Leonid Kuchma, Turkmenistan delivered 6 billion cubic meters of gas to Ukraine via Russia during the first quarter of 1999. Kyiv, unable to pay on time, has run up a US$223 million debt, including US$112 million in cash and US$111 million in the form of goods under a clearing arrangement. Niazov appealed to Kuchma last week by telephone to adhere to the payments schedule. The Ukrainian government–according to Niazov–then adopted a decision on delivering the goods, though not the cash, and priced the goods well above international market prices.

The Turkmen president sees no possibility of resuming gas deliveries under these circumstances (Ashgabat radio, April 21). Ukraine’s insolvency deprives Turkmenistan of its sole sizeable market for gas, discounting the northern Iranian market–which is currently capable of absorbing only a meager 4 billion cubic meters of Turkmen gas annually. The situation increases the pressure on Ashgabat to seek any potentially available export outlets and routes. This, in turn, underscores the urgency of financing and constructing the trans-Caspian pipeline via the South Caucasus to Turkey.

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