Kazakhstan threatens to give Karachaganak gas to China, not Russia

Kazakhstan intends to redicrect gas from its large oil and gas field of Karachaganak to the south, possibly to China, if fails to come to a settlement with Russia over acceptable price of supplies, reports IA Novosti-Kazakhstan citing Sauat Mynbayev, the country's oil and gas minister.

The minister explained that 7 billion cubic meters of the Karachaganak gas are regularly delivered to the Orenburg gas processing plant, of which 4.5 billion Kazakhstan takes back in swap schemes and 2.5 billion is sold to Russia. What dissatisfies Astana is the price these volumes are sold for.

According to Mynbayev, Kazakhstan may redirect the Karachaganak gas to the south of the country as soon as by 2015, and then to China, once the Beineu-Bozoy-Shymkent pipeline construction is over. The government expects large incomes in return to these fuel deliveries.

Kazakh gas seller in Russia is KazRosGas, a joint venture between Gazprom and Kazmunaygas owned on a parity basis.

Russia buys Kazakh gas for $200 per thousand cubic meters, while Turkmenistan and Uzbekistan sell it for $300, said Kairat Kelimbetov, vice premier of the Central Asian nation in an interview to Kommersant. 

He noted that Astana eyes China as a gas buyer, since Beijing will offer at least $300 for a thousand cubic meters.