Kazakhstan is preparing to offer for lease its network of pipelines carrying gas from Russia, Uzbekistan, and Turkmenistan.
The pipelines, now controlled by two state gas companies, export Russian gas to Europe, connect Uzbek gas fields to Russia, and export both Turkmenistani and Uzbekistani gas to Russia.
The pipelines are offered as 15-year concessions, providing the investor with management control and the right to levy transit fees, in return for payments and upkeep of the pipelines.
Enron Corp., Gaz de France, Argentina's Bridas Sapic, Switzerland's Nacosta, and Italy's Saipem SpA. have expressed interest in the offer.
Prospects, challenges
Observers said some of the potential bidders produce or hope to produce gas in the region and want to ensure access to export pipelines.
But they will face the challenge of managing part of a large gas network that used to be unified under Moscow's control but is now divided among 15 republics.
They will have to obtain transit fees from Turkmenistan and Uzbekistan and persuade the Russian gas monopoly Gazprom to increase access to its pipelines.
"The sector needs investments; it needs smart management," said Askar Alshinbayev, deputy chairman of KazKommertsBank, a powerful Kazakhstani commercial bank that organized the tender for the government.
He said while the investors could provide cash for constructing badly needed compressor stations, they also could offer some leverage with Gazprom, which has cut access to its pipelines and blocked exports to western Europe to keep out competition.
Western firms have complained the Kazakh tender offered insufficient information on the pipelines and a short concession period.
They also said a tender currently under way for management of Kazakh- gaz, one of the two gas companies, would conflict with the new tender.
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