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Tuesday 1 May 2012

Gazprom to Acquire 75% of KyrgyzGaz


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MOSCOW (Kommersant) – Russian Gazprom has a plan to acquire 75% of the KyrgyzGaz, a company that controls all transportation and distribution of natural gas in Kyrgyzstan, in August 2012. Kyrgyz leaders hope to import Russian gas and to have Gazprom extract gas from the Kugart and East Mailisu IV fields in Kyrgyzstan.

Kyrgyzstan has been negotiating with Gazprom for 10 years. According to Eugeniy Orlenko, the KyrgyzGaz deputy director general, first they will need to have a valuation of the company’s assets. The feasibility study has been already prepared. Besides, Gazprom will give auditor’s assessment of the company at its own expense. The signing of agreement will take place between the governments of Russia and Kyrgyzstan, in order to finalize the deal by September 2012.

Turgunbek Kulmurzayev, director general of Kyrgyzgas JSC, explained:

Kyrgyzstan will take a great advantage. Firstly, Russia will make geological prospecting of gas in the country, and secondly, tariff for the population will be very beneficial, as we become an affiliated company of Gazprom.

Gazprom intends to invest around US $500 million over the next 5 to 6 years into the KyrgyzGaz’ development, including modernization and expansion of the gas transportation lines.

It follows from the company’s official site that the government owns 82,3% of the shares, slightly under 8% belongs to the Social Fund of Kyrgyzstan and the balance has been distributed among individual shareholders via privatization auctions.

The Kommersant emphasizes the deal primarily benefits Bishkek, rather than Moscow: in February, president Atambaev said the country was prepared to sell off its natural gas assets at any time but “Russia does not seem to be interested”.

Today, Kyrgyzstan imports most of its natural gas from Uzbekistan and Kazakhstan.

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