China Trumps Gazprom

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Baev, Pavel K. (2009) China Trumps Gazprom, Moscow Times. 17 December.

Moscow times website

Up until last spring, Gazprom had pursued a policy of importing all available gas from Central Asia at almost any price based on the wishful assessments of trends in European and U.S. demand and in the valuation of its main product.

The main issue for Gazprom was actually to ensure that the redundant gas would not find a channel to the European market, so blocking the plans for a trans-Caspian pipeline has been a high-priority goal for Russia’s foreign policy.

Even in Moscow, Gazprom is worried that competing interest groups are gaining better access to Putin through Deputy Prime Minister Igor Sechin, while President Dmitry Medvedev’s vague but persistent discourse on modernization remains alien to the company’s hugely wasteful production methods and a bureaucratic corporate culture that is rife with corruption. Gaining control over the gas industry in Turkmenistan, preferably through production-sharing agreements and possibly in cooperation with European partners, should, according to basic common business sense, be a key strategic aim for Gazprom. Instead, it is content to let China move in, while Central Asia is downgraded to low-priority in an energy agenda that is dominated by concessions to Belarus, quarrels with Ukraine and bargaining with Turkey.

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