Kazakhs See Gas Export Prices Rising by 70%

ALMATY, Kazakhstan -- State energy company KazMunaiGaz said Tuesday that its gas export prices were likely to rise by as much as 70 percent from 2009 as part of a wider plan by Central Asian producers to charge Russia more for their supplies.

Gas export monopoly Gazprom said last week that it had agreed to buy gas from Uzbekistan, Kazakhstan and Turkmenistan at prices close to what it charges European customers, minus transport and other costs.

Gazprom charges Europe around $378 per 1,000 cubic meters and prices may hit $400, a Gazprom source said, implying a price spike for Ukraine, which pays $179.50 per 1,000 cubic meters for the Central Asian gas it is buying from Gazprom this year.

On Tuesday, KazMunaiGaz said in a statement that its own price could increase by 60 to 70 percent from January 2009 to up to $306 per 1,000 cubic meters, compared with $180 now.

Kazakhstan exports about 8 billion cubic meters of gas a year, mainly from its huge Karachaganak gas deposit in the west of the country.

Karachaganak is co-led by Italy's Eni and Britain's BG Group, each of which hold 32.5 percent stakes, while U.S. company Chevron owns 20 percent and Russia's LUKoil has a 15 percent interest.

Gazprom and the Karachaganak partners have agreed to process up to 16 bcm of sulfur-laden Karachaganak gas at the Orenburg plant for 15 years.

With output in Siberia stagnant, Gazprom imports up to 70 bcm per year from Uzbekistan, Turkmenistan and Kazakhstan to help cover demand in Russia, ex-Soviet states and Europe. The world's largest gas producer produces 550 bcm a year and exports around 150 bcm to Europe.