RUSSIAN ENERGY CORPORATIONS MOVE TO CONSOLIDATE THEIR POSITION IN THE CIS.

Russian prime minister Viktor Chernomyrdin traveled to Ashkhabad on January 13-14 in an effort to persuade Turkmen president Saparmurad Niazov to accept a new deal under which Gazprom will buy 30 billion cubic meters of Turkmen gas. The deal would allow Russia to send more of its own gas to Western markets. However, Niazov is holding out for $42 per 1,000 cubic meters while Gazprom is offering $36. Niazov is said also to be dissatisfied with a proposal for Russia to pay 70 percent in barter goods and only 30 percent in hard currency. This was the arrangement that Turkmenistan had previously with Ukraine. (Segodnya, January 16)

Russia is sitting tight, secure in the belief that Turkmen gas has nowhere else to go. The pipeline from Turkmenistan to Iran, which opened in December, will have a yearly maximum capacity of 10 billion cubic meters. Niazov wants to finalize the joint venture with Russia, called Turkmenrosgaz, which was created to handle Turkmen gas sales to Ukraine. But this too is on hold pending resolution of Ukraine’s $450 million debts for gas deliveries from Turkmenistan in 1996-97.

Meanwhile, Russia’s energy relations with Ukraine seem to be improving. Last week, Ukrainian first vice premier Anatoly Golubchenko signed an agreement in Moscow under which Russia will provide Ukraine with 52 billion cubic meters of gas in 1998, at a price lower than last year. (Two thirds of the deliveries are free of charge, in lieu of transit payments for Gazprom’s supplies to central Europe that cross Ukraine.) Ukraine still owes Russia $70 million for 1997 gas deliveries.

On January 16, it was announced that Russia’s LUKoil has decided to a buy 51 percent stake in Romania’s Petrotel refinery (which has a one million ton annual capacity) in order to process Azerbaijani oil shipped through Novorossiisk. LUKoil is also bidding for the Linos refinery in Ukraine, the largest in that country (with 15 million tons annual capacity). Forty percent of shares in Linos were put up for bid on December 1, with a price tag of $450 million. Increasing refining capacity around the Black Sea coast will obviate the need to ship more oil through the Bosporus, a bone of contention between Russia and Turkey. (Eastern Economist, January 17)

Ukrainian Securities Markets Develop in 1997.