Interview with Anatoly Romanovsky

Anatoly Romanovsky, analyst from Hermitage Capital Management, comments for Russia Today on Russia

Russia Today: Firstly, can we talk about the main news – about Mr Putin getting this agreement between Turkmenistan and Kazakhstan? Is that a great deal? How significant is this pipeline deal?

Anatoly Romanovsky: Firstly, it is an important deal and it is good for Russia because it gives Russia flexibility in developing various deposits it has on its own territory. It is good also because Kazakhstan, Turkmenistan and Russia won’t compete but rather co-operate in delivering gas to Europe which is the major market for them. It is good for Turkmenistan because once it is certain about the pipeline, and the ability to deliver gas, to the market, there will be more demand for participation in some projects on Turkmenistan territory in terms of developing vast deposits of gas.

RT: Mr Putin said it will boost the supplies to Europe and the rest of the world. Does that necessarily mean cheaper gas for the consumer?

A.R.: I would take gas pricing in Europe different from what it is in different places, and probably in China for instance. In Europe it is linked to fuel oils, and in this respect I can’t say that it will very much impact the price. It is influenced by the total balance in the oil market rather than some balance on the gas market. The gas market is still very regionalised.

RT: So, this is an exclusive deal, isn’t it? Turkmenistan could actually supply gas and resources to other parts of world. China for example is very interested.

A.R.: Turkmenistan has already signed an agreement with China about the supply of 30 BLN cubic meters – the same amount as we are talking about in this Caspian pipeline. It is still not clear whether Turkmenistan has an ability to ramp up its output to meet all the obligations.

RT: Is that because they don’t have the infrastructure to do that at this stage?

A.R.: I think yes, it is one of the major reasons.

RT: Then who will be investing to the infrastructure?

A.R.: I suppose those who signed the deals for the supply of gas. The Chinese will of course be involved, and Gazprom.

RT: What would be the implications for Turkmenistan as a country? Is it going to become a very rich country overnight?

A.R.: I believe in the Middle East we have real examples of very efficient, not diversification, but proliferation of oil wealth, and other sectors. I believe that Turkmenistan could follow that example and it is very important to start sooner rather than later when the oil prices and gas prices are high as they are now.

RT: And just finally about the alternative supply line – this is an oil pipeline initiative. Has this agreement yesterday between Turkmenistan, Russia and Kazakhstan had any significant impact on the intentions of other countries?

A.R.: I would say the oil market is different. It is global and it doesn’t matter for Russia if there is another pipeline going somewhere, you know, through Ukraine or Poland. And it does not matter much for the European or U.S. consumers of oil. They can buy it elsewhere and at any time. So it is easy to ship oil and it is not the case with gas. That is why a gas deal, this gas deal, is far more important.

RT: Concerning this proposal being discussed in Krakow – is this a realistic venture do you think?

A.R.: Probably it is a realistic venture, but again – the world should be more focused on what is happening in Turkmenistan and Kazakhstan.