Russian gas concern's plans with regard to Kazakhtan

Gazprom gas holding hopes to become the shareholder of the gas transportation system of Kazakhstan, if it will be sold, deputy chairman of Gazprom board Alexander Ryazanov told in an interview with RIA Novosti.

"It would be advantageous for Kazakhstan and Russia, and certainly for Gazprom, he stressed.

The Agency's interlocutor pointed out that "Kazakhstan is above all important for Russia as a transit state, and therefore we attentively follow the development of the Kazakh gas transportation system."

Mr. Ryazanov believes that at present "the capacity of the Kazakh gas transportation system does not correspond to Russia's requirements." "Russia has contracts with Uzbekistan and Turkmenistan, and big capacities will be needed to transit Uzbek and Turkmen gas to Russia through Kazakhstan," Mr. Ryazanov said. He specified that beginning from 2007 these volumes will exceed 70-80 billion cubic meters of gas a year.

According to Alexander Ryazanov, the Gazprom counterparts in Kazakhstan say they are ready to increase the capacities of the gas transportation system using their own or loaned money "without our direct participation, and under the long-term contracts which will be concluded."

"We welcome this approach, in principle," Mr. Ryazanov continued.

At the same time, he is of the opinion that Gazprom can create the joint venture for the expansion and modernization of the Kazakh gas transportation system and invest in it its assets and money and, certainly, load the existing system. "In any case I believe that both can be translated into life given mutual consent," Mr. Ryazanov stressed.

In the first six months of the year Gazprom transported via Kazakhstan 20 billion cubic meters of Turkmenian and more than 2 billion cubic meters of Uzbek gas. "These are great and impressive figures," he said.

The main network of the gas transportation system of Kazakhstan, which includes 10,000 kilometers of pipelines with an annual throughput capacity of up to 190 billion cubic meters, is being controlled by KazTransGaz with a 100% participation of the state.

At present the company is realizing the investment program. The main finances are planned to be spent on the restoration of the transit capacities of the Central Asia - Center (SATs) trunk gas pipeline. The general program of financing the SATs modernization calculated for 10 years is about $1.3 billion. The company is going to invest in the modernization of the trunk gas pipelines more than $500 million till the end of 2005.

The KazTransGaz company reported that the means for these purposes will consist of the company's own money and the tariff proceeds as well as the attraction of financial means of international financial groups and credits of the Kazakh banks.