The Oil Drum

When problems start to arise, it is common, and often wise, to focus attention on the issues that the problem starts to generate, and to reduce attention on less obvious other problems. So it is at present, when the rising price of oil, and its consequent impact on gas, and thence more general prices, is showing the vulnerability of the economy to the supply of this critical fuel.

But there is another fuel with an almost equally critical role in some aspects of our daily lives and that is natural gas. And with a growing reliance on Russian supplies and the Russian gas pipelines that also carry gas from places such as Turkmenistan, I think that more attention should be given to a statement made by Alexei Miller, CEO of Gazprom, last Thursday.

Gazprom forecasts that Russian gas prices will reach 500 U.S. dollars per 1,000 cubic meters by the end of 2008. "If oil prices exceed in the future 250 dollars a barrel, then gas prices will grow to 1,000 dollars per 1,000 cubic meters," Miller said.

As the year draws to an end, so Leanan has quickly caught the news that is only now being picked up elsewhere that the ruler of Turkmenistan, Turkmenbashi has died of an apparent heart attack with the immediate heir being announced as

Deputy Prime Minister Gurbanguly Berdymukhammedov as interim president -- in apparent violation of the country's constitution, which stipulates that the parliament speaker should take over until elections are held.

His nominal successor was the speaker Alezov, but, in the immediate consequence of the death, he has apparently been put under arrest (something that was prominent about 4 hours ago but which seems to have vanished from the Internet).

The reason for this little post is that Turkmenistan holds the fourth largest gas reserves around, and the future of these may now be in some doubt. We have written about some of the interplay between Turkmenistan, Russia and potential customers over the past year and it might be appropriate to repeat some of that information to remind you of the situation.

UPDATE: Thanks to Greko there is a Stratfor piece that gives more information on the current situation here .