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Gazprom to Buy the Kyrgyz National Gas Firm for $1

Friday 21 December 2012

BISHKEK (RIA Novosti) – Kyrgyzstan has offered Gazprom the option to buy 75% of the national gas company Kyrgyzgas for just $1, to help the struggling Kyrgyz firm settle its debt woes and cut the republic’s dependence on gas imports, Kyrgyzgas Deputy General Director Kuralbek Naskeyev said on Thursday.

“Today the heads of Kyrgyzgas and Gazprom will meet in Moscow to decide on [Kyrgyzgas’] privatization. Deloitte & Touche assessed our assets and gave two valuation options – $38 mln and about $20 mln,” Naskeyev said, adding that the Kyrgyz gas operator had debts of $38 mln.

Gazprom intends to buy 75% of Kyrgyzgas from the Kyrgyz government and also to launch development on the Mailuu-Suu-IV and Kugart gas deposits in southern Kyrgyzstan. This would allow meeting the domestic demand for 500 mln m³/year of gas. Kyrgyzstan currently does not produce natural gas and is wholly dependent on imports from Kazakhstan and Uzbekistan.

Gazprom Chief Executive Officer Alexei Miller met with Kyrgyz President Almazbek Atambayev in Moscow to discuss potential oil and natural gas work. “The meeting discussed Gazprom’s possible participation in privatization of Kyrgyz oil and gas facilities,” Gazprom said. “Special consideration was given to the company’s entry in the shareholding structure of Kyrgyzgaz.”

The deal would also allow Gazprom to start prospecting and developing the two gas deposits. Kyrgyzgas also plans to build a trunk gas pipeline in the north to facilitate gas transit to China, Naskeyev said.

Gas remains the main heating fuel for domestic use in the Kyrgyz capital Bishkek and the surrounding area. But extreme cold spells in winter prompt the local authorities to cut gas supplies to consumers to minimum levels. In one recent incident, residents across Bishkek had to deal with reduced gas supplies on Sunday evening after temperatures plunged to -24°C.

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