MOSCOW, August 23 (RIA Novosti) Russia moves to strengthen control over Central Asia / Russia, Europe lose common ground - expert / BP offers LNG plant in Trinidad and Tobago to Gazprom / Ukraine may be left without gas in the near future / Russian alcohol market may become world's largest by 2011
Nezavisimaya Gazeta
Russia moves to strengthen control over Central Asia
Russia plans to strengthen its military presence in Kyrgyzstan and to invest $2 billion in its economy.
Experts say that Moscow's geopolitical interest in the poorest and therefore potentially the easiest country to control in Central Asia has grown.
A fierce battle is under way for Kyrgyzstan as a bridgehead for an advance into and control over Central Asia. Russia has an air force base in Kant, and the United States has a similar base in the Manas airport.
The republic is at the crossroads of the economic interests of China, the United States and the European Union. China has invested more in Kyrgyzstan, Kazakhstan and Turkmenistan than Russia.
During the recent summit of the Shanghai Cooperation Organization, President Vladimir Putin said Russia could invest $2 billion in Kyrgyzstan.
Alexei Malashenko, an expert with the Carnegie Moscow Center, said: "This is a fantastic offer for Kyrgyzstan, whose budget revenues amounted to $600 million last year."
"According to the policy of patrolling airspace by strategic aircraft proclaimed by Putin," the Kant base "could play the role of a forward staging base for Russian aircraft flying to, say, Australia," Malashenko said.
Azhdar Kurtov, an analyst with the Russian Institute of Strategic Studies, said the strengthening of the Russian military group in Kyrgyzstan "is not an adequate political response" to the strengthening of other countries' economic positions in Central Asia, specifically of China and Kazakhstan.
"Such moves were made during the Soviet era, when weapons were handed out lavishly in the hope of recruiting the recipients' eternal friendship, and recently, when Russia wrote off Afghanistan's $10 billion debt," he said.
Ivan Safranchuk, director of the Moscow office of the Washington-based World Security Institute, said Russia was doing this "to prevent the establishment of American military bases in Tajikistan and Turkmenistan, and to undermine their presence in Kyrgyzstan."
According to him, Russia is trying to show that it "is prepared to involve Kyrgyzstan in different projects and to contribute to its development and security."
Taken together, these steps are designed to create a balance encouraging the authorities of Kyrgyzstan to conclude that the American military base in the country's territory is a disadvantage.
Novye Izvestia
Russia, Europe lose common ground - expert
Russia's Finance Ministry on Wednesday officially confirmed the nomination of Josef Tosovsky, a former Czech central bank chief, to head the International Monetary Fund, a move that paradoxically elicited a cold response from Prague a few hours after Russia's statement.
"I can't think why they chose Tosovsky in the first place," said Vladislav Inozemtsev, the head of the Center for Postindustrial Studies, a Moscow-based think tank.
"He now heads a small institute in Switzerland and is not widely known among the economic community. He has nothing to do with Russia either. The EU has nominated [Dominique] Strauss-Kahn [of France], who is a well-known European economist, and whose nomination was the result of an open discussion. Why would Russia stick to an obscure non-Russian, who stands no chance of being appointed anyway? The United States, with 17% of the vote, traditionally supports the European nominee. The EU countries have a total of 33%, so it makes no sense even to discuss any alternative nominations," the expert concluded.
He also suggested that the decision to nominate Tosovsky could be part of Russia's false perception of its global role. "A statement has just been made at the air show in Zhukovsky [near Moscow] that 10% of global air transportation should be done by Russian Tupolev jets. The date of the projected spaceflight to Mars was also discussed in earnest. Now we decide to nominate an obscure Czech national to head the IMF - well, it all fits together," he said.
"It will probably be attributed to the loss of common ground between Russia and Europe. It's not that we don't communicate - we just speak different languages," Inozemtsev said.
"This move could be aimed at showing the local public that Russia does not depend on Europe in its decision-making," said Dr. Oleg Zamulin of the New Economic School in Moscow. "Tosovsky will certainly not be approved, but that is not what matters. It was done to impress domestic voters, while other countries were not even expected to notice."
Vedomosti
BP offers LNG plant in Trinidad and Tobago to Gazprom
It is not for nothing that Russia's Gazprom cherished hopes that the purchase of the Kovykta gas condensate field (in the Irkutsk Region, Eastern Siberia) from TNK-BP, a Russian-British joint venture, would help the Russian gas monopoly to win new markets.
It turns out that BP is ready to set up a joint venture with Gazprom and contribute its stake in an LNG plant in Trinidad and Tobago. If the deal is signed, Gazprom may become one of the largest LNG suppliers to the United States.
Experts doubt that BP has offered its whole stake in the LNG plant to Gazprom.
Two months ago Gazprom, TNK-BP and BP announced their intention to create a three-way alliance. A month ago BP CEO Tony Hayward hinted that his company could contribute its transportation and gas storage assets to the joint venture. However, BP decided differently in the end. It offered its stake in an Atlantic LNG plant in Trinidad and Tobago.
The source close to TNK-BP who revealed all of this information declined to disclose the size of the offered stake.
A Gazprom spokesman confirmed the report. He said that it was one of BP's proposals, and that his company was now considering it.
BP is offering a lucrative deal to Gazprom. "BP's shares in Atlantic LNG enterprises are highly liquid assets with a profitable market," said Valery Nesterov, an analyst with the Troika Dialog investment company.
An Atlantic LNG site says that 75% of the plant's output is supplied to the United States. This is the very market that has long been sought by Gazprom.
According to Nesterov, in 2006 the United States imported 16.25 billion cubic meters (11.2 million metric tons) of LNG, of which 10.85 billion cubic meters (7.4 million metric tons) were supplied from Trinidad and Tobago.
BP is unlikely to offer its whole stake in Atlantic LNG companies to Gazprom as its contribution to the joint venture, Nesterov said. The analyst assessed their value at about $3 billion, much more than the value of Rospan and Gazprom's share in Rusia Petroleum, which was offered by Gazprom.
Meanwhile, back in June the sides agreed that Gazprom would hold a 50% stake in the venture, with the remaining shares to be equally divided between BP and TNK-BP.
However, Mikhail Korchemkin, an analyst with East European Gas Analysis, a consulting company, thinks that Gazprom should agree to BP's proposals only if it receives a stake in the company's gas producing projects. It is economically sound for a company to acquire a stake in gas processing enterprises only if it supplies its own raw materials to them, he explained.
Gazeta
Ukraine may be left without gas in the near future
Neither Moscow nor Kiev wants a repeat of last year's gas war. So talks on natural gas supplies in 2008 began almost six months ahead of the target date.
Ukrainian Deputy Prime Minister Andrei Kluyev said Wednesday that the price would be announced "in mid-September." He said Kiev did not expect it to rise beyond inflation.
But experts are predicting that if Kiev does not agree to European-level prices, Ukraine may soon find itself without any gas, either Russian or Central Asian.
There is no doubt that Gazprom, being a monopoly supplier of gas to Ukraine, would like to raise its price for Russia's Western neighbor to European levels, or to almost double it (the price for most of European Union countries is over $250 per 1,000 cubic meters). In the first half of the year Gazprom supplied 27.93 billion cubic meters of gas to Ukraine. Compared with 2006, its price went up from $95 to $130 per 1,000 cubic meters. The neighboring economy may crumple under such shock therapy.
Increased gas prices for Ukraine must not differ from prices acceptable to partners with low GDPs, and industries unable to bear a sweeping increase, said Viktor Baranov, president of the Union of Independent Gas Producers. Still, he believes "better a terrible end than terror without end" and "the higher the price the better."
Mikhail Krutikhin, a partner of the RusEnergy consultancy, said that if Ukraine does not agree to higher prices, it may get no Russian or Central Asian gas at all.
"Either no new gas pipelines will be built (note the construction of Nord Stream) and Ukraine will keep receiving gas, or all the gas will travel under the Baltic and Black seas. There will not be enough gas for the two options," Krutikhin said. The reality is that Gazprom is doing little to increase gas production, while Turkmenistan has binding obligations to China.
Kommersant
Russian alcohol market may become world's largest by 2011
The Russian alcohol market may become the largest in the world by 2011-2012, owing to the Russians' growing incomes and the conservative structure of consumer spending.
Last week Russian investment group Renaissance Capital published a vodka survey, according to which Russia ranks second in the world after the United States in terms of gross volume of its strong drinks market - $16.9 billion compared to $19.2 billion in 2006 (in retail prices).
The Unites States retains the lead only because it has a larger population (it is not on the list of the world's top 10 countries in terms of per capita alcohol consumption).
China ranks third and stands close to Russia, although its alcohol market is growing slower than Russia's.
The Russian Federal Statistics Service reported that spending on alcohol has been stable in the country for the last three years, despite substantial growth in incomes. However, the turnover growth slowed in 1999-2006, when vodka production increased by only 8.2%.
If the current trends on the alcohol market persist, Russia may become the world leader by 2011-2012. This could have happened sooner, if not for the introduction of the Unified State Automated Information System (EGAIS), which provoked a temporary stagnation on the market in 2007.
Renaissance Capital believes that Russian alcohol companies have become "quite attractive as investment destinations," but points to their non-transparency and the high regulator risks involved.
None of the major Russian alcohol producers are now listed on stock exchanges.
Besides, the market is split (the group of top 10 producers controls not more than 40% of the market), so the investment bank predicts a wave of mergers and takeovers in the vodka sector, similar to that which has recently swept the beer market.
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