MOSCOW, February 22 (RIA Novosti) CIS countries may recognize Abkhazia, South Ossetia/ United States flexes its military muscle in space/ Gazprom may get access to French, Belgian gas networks/ Instead of aircraft Russia will build railroads for Algeria/ Russian-Ukrainian gas talks end in fiasco/ Russia freezes Lufthansa bank accounts over tax dispute
Nezavisimaya Gazeta, Vedomosti
CIS countries may recognize Abkhazia, South Ossetia
The Kosovo precedent and its consequences for the CIS states with 'frozen' conflicts (Georgia, Moldova and Azerbaijan) will be discussed at an informal CIS summit in Moscow today.
Abkhazia and South Ossetia plan to appeal to the CIS to recognize their independence.
Azerbaijan, which is involved in a drawn-out conflict with Armenia over Nagorny Karabakh, Georgia, which is trying to regain control over Abkhazia and South Ossetia, Moldova, which wants Transdnestr back, as well as Tajikistan and Belarus have refused to recognize the self-proclaimed independence of Kosovo.
Ukraine has made no announcement yet, but parliament speaker Arseny Yatsenyuk had earlier said that Ukraine would recognize Kosovo.
Abkhazia and South Ossetia believe their independence could be recognized as early as this year. Eduard Kokoity, President of South Ossetia, told the popular daily Nezavisimaya Gazeta that the two breakaway republics would appeal to the UN, the European Union and the CIS.
It will be the first time these republics will appeal to the CIS. A source in the Russian Foreign Ministry said this could be crucial for Abkhazia and South Ossetia. The CIS leaders could announce official recognition of the four self-proclaimed republics at their meeting in Minsk or Bishkek.
According to the February 15 statement by the Russian Foreign Ministry, Russia will not recognize the independence of the breakaway republics, but will provide extensive financial and humanitarian aid to them because many of their citizens are Russian passport holders.
Maxim Gvindzhia, Deputy Foreign Minister of Abkhazia, said: "Pensions are the main assistance from Russia."
In 2007, Russia paid 590 million rubles ($24.05 million) in pensions to Abkhazians, 80% of whom are Russian citizens. Russian investment in the republic will exceed $200 million, the press service of Abkhazia's president reported in November 2007.
Russian nationals constitute 96% of the population in South Ossetia.
Russia has invested 640 million rubles ($26.09 million) in Transdnestr, Yevgeny Shevchuk, parliament speaker of the self-proclaimed republic, said in December 2007.
Political analyst Alexander Skakov told the daily Vedomosti: "Moscow is using an economic argument to caution Georgia against trying to use military force to regain control of the breakaway republics."
Russia would like Georgia to sign agreements on the non-use of military force with Abkhazia and South Ossetia, but Tbilisi has so far refused to yield.
Kommersant, Komsomolskaya Pravda
United States flexes its military muscle in space
A missile launched from a Navy ship near the Hawaii successfully struck the decaying USA-193 spy satellite passing 130 miles (250 km) over the Pacific on Thursday. U.S. officials said the operation had been conducted in order to destroy its toxic fuel tank and to prevent possible contamination of the Earth's surface during reentry.
However, analysts said there was no immediate danger of contamination. Andrei Ionin of Consulting Group ROEL Consulting said the fuel tank and its contents would have burned up completely during reentry.
Analysts said the United States did not want other countries to obtain any of the satellite fragments and had made a show of force with regard to other space powers, primarily Russia and China.
According to independent experts, the USA-193 was an experimental satellite for streamlining advanced optronic and radio-electronic reconnaissance systems.
Most experts believe that the rogue spacecraft was destroyed in order to assess the effectiveness of the U.S. anti-satellite system. Ionin said China had tested an anti-satellite system involving a large and easy to detect missile last February but that the U.S. had covertly tested the system, and that its missile interceptors could be launched from Navy ships all over the world.
This is the first ASAT weapons test after a 22-year congressional embargo. Experts said Moscow and Beijing would now strive to shield their spacecraft from U.S. missile interceptors.
The Pentagon is perfecting its top-secret satellite-killer system, Colonel Andrei Vlasikhin, a leading authority on aerospace defense, told the paper. He said the Soviet Union had developed, tested and subsequently mothballed a similar system.
A source in the defense industry said Russia and China would now be forced to spend large sums on space defense, and that Moscow would have to boost defense spending in order to maintain parity with Washington, which had more advanced space weapons.
Gazprom may get access to French, Belgian gas networks
Russia is to develop the giant Shtokman gas condensate deposit (in the Barents Sea) together with France and Norway. The sides have signed a trilateral agreement to establish a special company for this purpose. Russian gas monopoly Gazprom wants to share risks [with partners] and use their technology for shelf operations. However, Gazprom's main objective is to get access to gas distribution networks in partner countries, though the EU is doing its best to prevent it.
The new company has been registered in Switzerland as Shtokman Development AG (with 51% of its shares to be held by Gazprom, 25% by French Total and 24% by Norway's StatoilHydro). According to preliminary estimates, it will cost $12-$14 billion to develop the field (with reserves of 3.8 trillion cubic meters of gas and about 37 million metric tons of gas condensate) in the first phase of the project.
It is likely that Gazprom will want to participate in developing the partner countries' deposits and, primarily, to get access to their gas distribution networks. "The participation of French Total in the project is indirect proof that Gazprom will get access to the gas distribution networks in France and also in Belgium," said Khalil Shakhmametiev, head of analysis at the Otkrytie financial corporation.
However, this prospect is still doubtful. According to Timur Khairullin of the Antanta Capital investment company, "Gazprom will get these companies' assets at most. Despite their lobbyist positions in Europe, many decisions are taken at an EU level. Gazprom must overcome its political veto in order to expand its presence."
Experts believe that the influence of France and Norway in the EU is so strong that these countries can make independent decisions. "It is strategically important for both France and Norway, which have substantial influence in Europe, to participate in the Shtokman project. It is not unlikely that these countries' governments will meet Gazprom halfway and say their weighty word in support of Russia as an energy partner," said Alexei Makarkin, deputy director general of the Center for Political Technologies.
Instead of aircraft Russia will build railroads for Algeria
Russian Railways (RZhD), a state-controlled monopoly, yesterday announced it had won a tender to build a railroad in Algeria. The triumph was partly due to Russia agreeing to recall its 15 MiG fighter aircraft supplied to Algeria. According to experts, the new contract worth about $300 million is way below the aircraft deal of $1.286 billion. However, in the next few years Algeria plans to spend $7 billion on railroad construction.
A high-placed source in the Industry and Energy Ministry said RZhD's victory was part of the conditions under which Russia agreed to take back 15 MiG-29SMT and MiG-29UBT aircraft delivered to Algeria.
A source in the Federal Service for Military and Technical Cooperation said: "Algeria needs to show to France and the United States that it is not dependent on Russia for oil, gas or military cooperation. The MiG contract was a random hit: it was chosen for the political demonstration because it was the first involving a large delivery."
The source did not say the contract was canceled. "Algeria may take up the idea of buying Russian planes again," he said. Algeria has already been offered more modern MiG-29M2s and MiG-35s.
A source in the aircraft industry said there is prior agreement to resell the 15 planes being returned by Algeria to Russia's Defense Ministry. "The MiG-29SMTs from Algeria should be turned over to Russia's Air Force," said Konstantin Makiyenko, an analyst at the Center for the Analysis of Strategies and Technologies. "Russian pilots will get up-to-date fighters for the first time since the Soviet Union broke up, and export contractors will be given a clear signal that a domestic option instead of a foreign option is not mere rhetoric."
Alexei Bezborodov, head of the InfraNews research agency, estimated the railroad contract at $300 million, or $2 to $2.5 million per kilometer. According to foreign press reports, the Algerian government plans to spend $7 billion on railroad construction up to 2010, and RZhD has the chance of cooperating further with the country.
Russian-Ukrainian gas talks end in fiasco
Ukraine's Prime Minister Yulia Tymoshenko was reluctant to return home after two difficult days of gas talk without resolving all outstanding issues. However, Russia's gas giant Gazprom said not everything had been resolved.
Tymoshenko proposed going back to a Russian-Ukrainian consortium project to manage Ukraine's pipeline system and shutting any mediators out of the gas supply system. Both proposals are not in line with the agreements reached in February 12 by the presidents of Russia and Ukraine. Gazprom, in turn, responded by reminding Tymoshenko that Ukraine still owed Russia for the gas supplied in 2007, and for some gas deliveries this year as well.
Two sources close to Gazprom said the meeting was a fiasco. The $130 per 1,000 cu m and the intermediaries issue had been agreed upon earlier, one of them added, while Tymoshenko's proposal for Gazprom to contact Ukraine's Naftogaz directly meant even bypassing their joint subsidiaries.
Gazprom agreed to contact the Ukrainian company directly, but only for 1st quarter deliveries and at the more expensive price of $320 per 1,000 cu m for Russian gas, said Gazprom's press spokesman Sergei Kupriyanov. Also other issues need to be settled between subsidiaries. President Vladimir Putin agreed a scheme for such joint subsidiaries with Ukraine's Viktor Yushchenko on February 12.
Janos Petofi, director general of Hungarian wholesale gas distributor Magyar GT, said Gazprom would not agree to Tymoshenko's proposals until it was absolutely confident that Ukraine would repay its debt and give the Russian monopoly access to its domestic market. But even in this case, the expert added, Gazprom would not be selling cheap.
"Ukrainian pipelines are no longer as important as they were in 2002," he explained. "In 2011, after the Nord Stream and South Stream projects come on stream, Gazprom will no longer be interested in Ukrainian export routes."
Tymoshenko's presidential campaign is already on, said Vladimir Kornilov, the head of the Ukrainian affiliate of the Moscow-based Institute of CIS Countries. She needs to either show the nation a breakthrough, or at least to have a right to claim she had been defending Ukraine's interests until the very last moment.
Konstantin Bondarenko, director of the Ukrainian Institute for Administrative Problems, and one of Ukraine's most prominent political analysts, said Tymoshenko presented her initiative separately from President Yushchenko, but it had not met with any success so far.
Yushchenko, in turn, accused Tymoshenko's cabinet of sabotage.
Russia freezes Lufthansa bank accounts over tax dispute
The Russian government has frozen several bank accounts belonging to air carrier Deutsche Lufthansa AG in Russia because of a dispute over tax payments. The Russian government is demanding back tax payments of around 5-7 million euros from the German airline.
Analysts said ordinary tax disputes, including a recent case involving Dutch flag carrier KLM, were usually settled out of court and without freezing corporate accounts.
Analysts said Lufthansa could unfreeze its accounts soon, but that it also had problems with other Russian agencies. For instance, the Transport Ministry wants Lufthansa's Asian-bound freight aircraft to land in Novosibirsk or Krasnoyarsk, rather than in Astana, the capital of Kazakhstan, in order to boost local air traffic and airport profitability. However, the German airline is in no hurry to meet this demand citing inadequate technical standards at Siberian airports.
On October 28, 2007, Russian aviation authorities refused to extend the overflight license for Lufthansa Cargo, but several days later issued a temporary permit until November. The permit was later extended until early March 2008.
Lufthansa will soon have to choose between Kazakhstan and Russia. However, its Russian bank accounts could be frozen somewhat longer pending transit-payment talks with Moscow.
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