Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Tractebel to Get New Terms or Exit Kazakhstan

BRUSSELS, Belgium -- Energy company Tractebel said Tuesday it expects to reach a deal in coming weeks with the Kazakh government over the future of its Kazakh operations, with a complete exit from the Central Asian country a possibility.

Spokesman Jacques Van Hee said Tractebel would either pull out of Kazakhstan, where its loss-making gas and electricity businesses have been plagued by legal and political disputes, or reach new terms under which to operate.

"We believe a solution should be finalized in the coming weeks," Van Hee said. "This solution could either mean Tractebel leaves Kazakhstan under acceptable conditions or stays in Kazakhstan in better conditions."

On Friday, Interfax quoted the Kazakh energy ministry as saying Tractebel, a unit of French utility Suez Lyonnaise des Eaux, had agreed in principle to exit Kazakhstan and would make an official announcement this week.

Tractebel's Intergas Central Asia operation has a 20-year concession to run two natural pipelines through Kazakhstan, while its Almaty Power Consolidated JSC business delivers heat and electricity to the former Kazakh capital.

Van Hee said recent talks between the Belgium-based firm and Kazakh authorities had been constructive, allowing the air to be cleared and work to begin toward finding a "concrete" final settlement.

However, he declined to comment on a report in Belgian newspaper De Morgen that the Kazakh government had offered Tractebel 1.4 billion cubic meters of gas as compensation for its withdrawal from the country.

De Morgen said that at current market prices such a quantity of gas would be worth $110 million, about equal to the amount Tractebel has invested in Kazakhstan since 1995.