By Maria Zhigadlo
The Caspian Post presents an interview with Stanislav Tkachenko, Doctor of Economics and Professor at St. Petersburg State University. In recent years, the issue of energy security has become a key topic for Central Asian countries, especially for Kazakhstan, which is seeking to diversify its gas supplies and ensure the stability of its energy system. Against this backdrop, Kazakhstan's negotiations with Gazprom on potential gas supplies of up to 10 billion cubic meters annually to the northern and eastern regions of the country have attracted significant attention. However, the path to a comprehensive agreement is complex and requires resolving a range of issues - from supply terms and payment currency to the modernization of existing pipeline infrastructure. In this exclusive interview, Stanislav Tkachenko shares his insights on the main terms and potential challenges of the gas deal, the prospects for expanding the "Saryarka" pipeline, and Kazakhstan's possible alternatives in case the negotiations with Gazprom fail. He also analyzes the broader implications of these energy negotiations for Central Asia, including Russia's ambitions to expand gas supplies to Uzbekistan.
-The Ministry of Energy of Kazakhstan is actively negotiating with Gazprom regarding the potential supply of up to 10 billion cubic meters of commercial gas per year, aimed at gasifying the northern and eastern regions of the country. The Ministry of Energy of Kazakhstan reported this information. What are the main terms and timelines for the proposed gas supplies of up to 10 billion cubic meters per year from Gazprom to gasify the northern and eastern regions of Kazakhstan?
- Since the negotiations are still ongoing, making any predictions about the specific terms of the future agreement would be premature. Given that the approximate volume of gas required (10 billion cubic meters annually) is more or less clear, Gazprom and the Government of Kazakhstan need to agree on several other parameters essential for the agreement to be signed. In the coming weeks, the parties will need to determine the following: the duration of the agreement (Russia would prefer a long-term contract for 20-25 years, while Kazakhstan might favor signing a new or adjusted agreement annually); the supply conditions (peak winter supplies for Kazakh consumers and reduced volumes in summer); the payment currency (Russia prefers rubles, while Kazakhstan might suggest another currency); and the payment terms (guaranteed annual volumes or payment upon delivery, either monthly or otherwise).
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Additionally, the parties need to assess whether the existing regional gas pipeline network, inherited from the Soviet era, is sufficient or if they will need to discuss the construction (or complete modernization) of the pipeline infrastructure, which was built in a different era for entirely different economic tasks. It is certain that Russia has enormous natural gas reserves in Western Siberia, which can be supplied to consumers in Central Asia. Besides Kazakhstan, Russia is also targeting the rapidly growing economy of Uzbekistan. Gazprom hopes that its emergency winter gas supplies to Uzbek consumers will soon turn into year-round deliveries. As the economy and population grow, demand will continue to rise to volumes comparable to or even exceeding those required by Kazakhstan (10 billion cubic meters per year).
- What are the key obstacles in the negotiations between Kazakhstan and Gazprom on concluding a long-term gas supply contract, and how are they planned to be resolved?
- I am not aware of any such obstacles. Kazakhstan produces significant volumes of oil and is one of the largest exporters outside OPEC. However, natural gas production in the country, which amounted to about 60 billion cubic meters in 2024, has been stagnating and is lagging behind the growing needs of industry and public utilities. Gas exports have even been declining in recent years, totaling about 8 billion cubic meters in 2024, with a clear prospect of ceasing altogether in the next 5-10 years. Therefore, in the coming years, Kazakhstan will be able to meet the gas needs of its densely populated southern regions. However, it will not be able to maintain the current gas supply volumes to the industrially developed northern and eastern regions. Switching from gas as the main source of energy for electricity and heat production for public utilities would be very expensive, time-consuming, and financially unfeasible. Hence, Russia, which holds the world's largest natural gas reserves, appears to be the optimal solution for addressing this problem comprehensively.
- What factors will be decisive in choosing the scenario: using the Russia-China transit gas pipeline or expanding the "Saryarka" pipeline for gas supplies to Kazakhstan?
Photo credit: baiterek.gov.kz
- This is something that Russian and Kazakh negotiators need to determine. Given that the current and future electricity deficit could be addressed by building nuclear power plants and generating electricity from renewable sources, the expansion of the "Saryarka" pipeline to increase the transportation of Kazakh gas from western fields to the capital region and the center of the country might not be necessary. Gazprom is, of course, interested in connecting its pipelines to the current (or potentially expanded) "Saryarka" network, but this decision still requires careful consideration. I believe this is what experts in Astana are currently focusing on.
The prospects for constructing a main gas pipeline from Russia's Western Siberia to China through the territories of Central Asian countries (Kazakhstan and possibly Kyrgyzstan) remain highly uncertain. Similar to the "Power of Siberia-2" project, which has been under discussion between Beijing and Moscow for more than five years, this project will face China's tough stance demanding gas supplies from Russia at domestic Russian prices. Unless there are dramatic developments in the security sphere (such as an open conflict between the U.S. and China or a maritime blockade of China by Western countries), I would not expect any breakthrough decisions on the aforementioned projects in the coming months.
Photo credit: table.media
- Is Kazakhstan considering alternative gas supply options if negotiations with Gazprom do not lead to an agreement, and what could be the potential sources or partners?
- I am not aware of any such considerations. I believe that the Government of Kazakhstan and the country's major businesses are exploring options for electricity production from sources other than natural gas - for example, from coal, fuel oil, or nuclear energy. However, I would emphasize that expanding Russian gas supplies is the most optimal solution for Kazakhstan in terms of both timelines and contract prices.
