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Tuesday, 28 June 2005
Ukraine to pay 100% Cash for Turkmen Gas Deliveries
Topic: Economy & business
Ashgabat, 24 June 2005 (nCa) --- It was decided Friday during a meeting between President Niyazov and the Ukrainian delegation headed by Chairman of NeftegazUkrainy that in future Ukraine would pay 100% cash for the natural gas it buys from Turkmenistan. Barter element has been eliminated.

According to the document signed between the two countries, starting 1 July 2005 Ukraine would pay entirely in cash for the gas volumes it obtains from Turkmenistan.

The new price – actually the old price of December 2004 level, sans barter element – would be US $ 44 per 1000 cubic meters.

It must be recalled that up to December 2004, Turkmenistan was shipping its volumes to Ukraine at US $ 44 per 1000 cubic meters but the supplies were halted because of the concerns that Ukraine was charging unrealistically high prices for the items it supplied under gas-for-goods plan. The arrangements then allowed for 50% payment in cash and 50% in the shape of goods and services.

When Turkmenistan stopped gas supplies to Ukraine on 1 January 2005, the problem was resolved after three rounds of negotiations by agreeing that the supplies would be resumed to Ukraine at US $ 58 per 1000 cubic meters. Barter element remained in place.

However, as it turned out later, Turkmenistan again had the reason to complain that Ukraine was not keeping to its end of the bargain. A circular issued by the foreign office of Turkmenistan asserted that Ukraine had failed to supply items worth about US $ 600 million for the barter portion of gas volumes. Most of the accumulated debt was incurred during the first five months of this year.

There were also bitter complaints that Ukraine was again charging very high prices for the barter items. At one point, President Niyazov called it a “mechanism for swindling”.

During the last one week some top officials of the oil and gas sector of Turkmenistan were fired for being instrumental in obtaining exorbitantly priced items from Ukraine, presumably because of some personal gratification.

The new documents signed this Friday would bring transparency to the process of exporting Turkmen gas to Ukraine.

Turkmenistan has reduced the gas price from US $ 58 to US $ 44 per 1000 cubic meters but the entire payment must now be made in hard cash.

Moreover, under the new understanding between the two countries, Ukraine must clear the outstanding log of barter items by December 2005. It is also stipulated in the documents signed today that prices of items supplied under this scheme must be “similar to average world market prices.”

Turkmenistan would not allow any rise in the prices until the outstanding debt is cleared.

The new agreement comes in force on 1 July 2005 and would remain valid in 2006.

Even though Ukraine had rejected categorically a few days ago any possibility for switching to 100% cash payment, it was clear by this afternoon that Ukraine would prefer long-term partnership with Turkmenistan rather than short sighted squabbles.

In all, four documents were signed during Niyazov-Ivchenko meeting. These include revised payment system, supplementary agreement on delivery of barter goods by 31 December 2005, increase in the volume of investment gas from 4.5 bcm to 5 bcm for 2006 and allocation of investment gas to Ukrainian companies working in Turkmenistan.

Alexi Ivchenko, head of NaftegazUkrainy, signed the documents on behalf of his government.

Posted by countryturkmenistan at 10:45 AM
Wednesday, 22 June 2005
Ukraine owes Turkmenistan nearly US $ 600 million dollars in goods for natural gas supplies
Topic: Economy & business
21 June 2005. Turkmen President Saparmurat Niyazov received Monday a delegation of the national joint-stock company Naftogaz-Ukraine headed by board chairman Oleksiy Ivchenko. A telephone conversation between the presidents of Turkmenistan and Ukraine took place during the course of the meeting at the request of President Victor Yushchenko, the Turkmen Foreign Ministry’s press service said in a statement.

At the meeting, the sides noted that Turkmenistan, being a reliable trade-economic partner, ensures strict and timely supplies of natural gas to Ukraine as provided in the relevant agreements and contracts, according to the Foreign Ministry.

At the same time, the Ukrainian side doesn't fulfill its contractual obligations. This, first of all, concerns barter payments for Turkmen gas supplies that exclude fixing of any rates, the statement notes.

In this connection, the statement emphasizes that Ukraine still owes Turkmenistan US $ 61.7 mln in goods for 2004 alone and US $ 500 mln in goods for the first five and a half months of this year as payment for Turkmen natural gas supplies.

During the negotiations, the sides especially stressed the fact that bilateral relations need to be built on a mutually-beneficial, civilized basis. It is with this in mind that Turkmenistan “leaves the door open” and, on condition of fulfillment of its obligations by the Ukrainian side, will continue to provide Ukraine with the requested amount of Turkmen natural gas.

In conclusion of the telephone conversation, Ukrainian President Viktor Yushchenko assured his counterpart that the Ukrainian side would take all necessary steps to ensure the delivery of goods in Turkmenistan as repayment of a debt totaling nearly US $ 600 mln, the Turkmen Foreign Ministry statement says.


Posted by countryturkmenistan at 2:26 PM
Tuesday, 21 June 2005
Partnership "Under Ground"
Topic: Economy & business
Ukrainian specialists are laying down the unique communication and drainage tunnel

Most of the modern facilities in Ashgabat are either built according to the unique projects or have no match in the region with regard to their scale and applied technologies. This is the main peculiarity the country’s leadership adopted in its approaches to the development of the capital. Everything here is done with consideration of the long-term perspective and according to the highest international standards. It is not by chance that two years ago the program of Ashgabat’s water supply and sewage systems development until 2050 was worked out and adopted under the patronage of the head of state. The program provides for several stages of this large-scale project’s realization.

Indicators of this document were calculated based on the forecast that the Turkmen capital’s population would grow up to 1.100 million people by the end of 2010. By this time, the daily water consumption in the city is expected to rise to 400 liters per capita. The overall discharge of sewage is to reach 600 thousand cubic meters a day, up 25 per cent on the current level.

In the remaining period until the end of 2010, the municipal services will have to lay 350 km of water supply pipes, put into operation a new water supply facility, “Severniy”. Four operational sewage collector systems will be renovated and two more collectors will be built.

By 2006, the capacity of the city water supply networks is expected to rise up to 900 thousand cubic meters a day enabling it to serve the population of 1.700 million people. Thus, the problem of sewage as well as the water supply task are being solved taking into account the 50-year perspective.

One of the principal stages of such large-scale program’s implementation is connected with laying down a communication and drainage tunnel. This project is currently being implemented by the Ukrainian company, “Interbudmontazh”.

This facility is one of the areas of the investment cooperation between Turkmenistan and Ukraine. The problem of the longstanding Ukrainian debt for supplied Turkmen gas played a major role in resorting to such kind of cooperation. Since Ukraine had no cash to pay the debts Ashgabat agreed to the proposal to use investment projects in the territory of Turkmenistan as a solution of this problem. Thus, the Ukrainian specialists got new jobs, and the Turkmen side – a number of objects constructed by the partners for debts repayment.

Later, when Kiev succeeded in liquidating the arrears accumulated in the past, the sides decided to continue such model of cooperation beneficial for both countries. As a result, for instance, the agreement on Turkmen gas supplies in 2005 stipulates that 4.5 billion cub m of gas out of the general volume of 36 billion cub m will be delivered as a payment for investment projects implemented by the Ukrainian companies. These projects include construction of a number of compressor stations, a railway and motorway bridge across the Amudarya river and a communication-drainage tunnel in Ashgabat.

“There are a few such projects in the world,” says the Ashgabat office of Ukrainian “Interbudmontazh” company. “The 22-km tunnel with the diameter varying from 3 to 6 m, equipped with the drainage wells and horizontal self-discharging holes will be also used to lay trunk sewage and water supply systems, power cables and communication lines. The tunnel’s size makes it possible for the service personnel to move along it using special repair battery-driven vehicles”.

On August 31, 2001, the city’s administration and Construction Association “Interbudmontazh” signed a construction contract. The first line of the project shall be commissioned in mid next year.

The tunnel built 12-17 m under the ground with the total value of US $ 204 million will “hide” all communication systems and make it possible to operate them more effectively avoiding cases of trenching through the avenues to conduct repair works which is a natural scene in big cities. The multifunctional facility will accommodate the trunk power cables, water pipes, heating system, sewage and communication lines.

“Interbudmontazh” was awarded another contract to drain the sewage outside of the city. It deals with designing and construction of sewage treatment plants with the capacity of 300,0 thousand cub m a day with the 3.5 km long discharge collector and 10.5 km long end parts of the drainage collectors of the drainage-communication tunnel.

It should be noted that the Ukrainian company attaches great importance not only to the quality of works but also to the timely commissioning of the facility. Much is done to train local specialists who will be entrusted with maintaining this tunnel in the near future. Young men from Turkmenistan have the opportunity to get education in the educational establishments of Ukraine. As for those Turkmen citizens that are currently engaged in building this original “municipal metro”, they are also receiving the invaluable experience.


Turkmenistan Analytic Magazine

Posted by countryturkmenistan at 1:43 PM
Friday, 17 June 2005
Turkmenistan to Weave Countrywide Textile Network by 2010
Topic: Economy & business
Ashgabat, 27 May 2005 (nCa) --- Addressing the opening ceremony of a couple of textile mills Thursday, President Niyazov announced that by 2010 the remaining 26 districts of Turkmenistan would have at least one textile complex each.

His remarks came during the inauguration of two textile units, one in VekilBazaar district of Mary province and the other in Halach district of Lebap province.

At present 21 districts have got textile processing and production facilities, a quantum jump since independence when only Ashgabat, Mary and Turkmenabat (then Charjou) had some rudimentary textile mills and the rest of the cotton of Turkmenia SSR was sent by the red Kremlin to Ivanov industrial town near Moscow for processing.

Under the national development programme up to 2020, Turkmenistan is building its textile complex on the principle that any district that wants to have a textile unit should be able to produce adequate volume of cotton to keep the factory running.

The VekilBazaar textile complex built by Angin-led consortium combines spinning, dyeing, weaving and stitching felicities. Spread over an area of 20 hectares, it can process 10220 tons of cotton yarn annually to produce 63.7 million square meters of fabric.

Swiss and Belgian machinery has been used in the factory and it has opened 300 new job vacancies for the local population.

Angin Kaliy (phonetically spelled), Head of Angin was present during the opening ceremony. His group of companies has already built textile factories in TakhtaBazaar, TurkmenKalla and SakarChag districts of Mary province.

Another textile factory was opened in Halach district of Lebap province. This factory has been built by the Turkish company Norsel, one of the oldest foreign companies in Turkmenistan. First phase of the factory had been opened earlier and now the factory has been completed according to planned specifications. The entire project cost US $ 27 million.

The Halach factory is equipped with German and Swiss machinery. It is designed to process 10100 tons of cotton fiber annually. It can produce 9100 tons of quality yarn and a wide range of downstream products. Most of the products of Halach are expected to find an export market, with the likely annual profit of 60 billion Manats.

Based on the quality of Halach factory, President Niyazov asked the head of Norsel to start another textile project in the locality in January 2006. The new project would be a composite unit, taking in raw cotton and churning out garments and textile made-ups.

Niyazov also asked the ministry of textiles and Turkish company Gap Inshaat to design another textile project for Turkmenabat district. He also said that by 2010, all the cotton producing districts would have at least one textile complex each.

The Turkmen president went on to praise Turkmen-Turkish relations. "Relations between Turkmenistan and Turkey are unique and need no political back-up. These relations are based on mutual advantage and benefit. And no party or state leaders are involved in this process," Nyyazow said, adding: "Turkmenistan is ready to back up Turkey and to come to its assistance whenever Turkey has any trouble and needs assistance."

Posted by countryturkmenistan at 1:46 PM
Wednesday, 15 June 2005
Malaysian oil company Petronas plans to invest over $210 million in Turkmenistan
Topic: Economy & business
9 June, 2005. Malaysian state oil company Petronas that has been prospecting the Turkmen sector of the Caspian sea since 1996, plans to invest over $210 million in this area, the Turkmen government official told Reuters.

“Petronas will continue exploration works at offshore oil blocks worth US $ 210 mln and hopes to get the early oil by this autumn,” he said on Thursday.

Petronas was the first foreign company to sign an oil and gas production sharing agreement (PSA) with Turkmenistan on Block-1 which includes three oil fields, Gubkina, Jdanova and Livanovo.

According to the Turkmen source, the company plans to bring in an additional drilling rig and to drill three more testing wells by the end of the year. At the same time, the company will build an infrastructure to ensure the transportation of crude.

Petronas is currently holding talks on the mechanism of realization of hydrocarbons.

Exploration works conducted in the last years proved that, apart from oil, Block-1 contains great volumes of associated gas. In this regard, Ashgabat asked Petronas to help build a gas pipeline along the Caspian Sea coast to Russia.

Apart from Petronas, four more foreign companies operate in Turkmenistan: Maersk Oil, Burren Energy, Mitro International and Dragon Oil. They are implementing two onshore and three offshore projects. Only Dragon Oil deals with oil output in the sea.

German Wintershall is going to start prospecting works on the Caspian Sea this summer. PSA are expected to be signed with Dutch Berlanga, Russian Zarubezhneft and Rosneft and Itera’s subsidiary Gazhiminvest, LUKoil and other companies.

Ashgabat claims that hydrocarbon reserves of the Turkmen sector of the Caspian Sea are estimated at 11 bln tonnes of oil and 5,5 trillion cub. m. of gas. Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran are still at odds over the final division of the Caspian resources.


Posted by countryturkmenistan at 4:51 PM
Updated: Thursday, 16 June 2005 11:24 AM

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