Tractebel to close all operation in Kazakhstan

Apr 30, 2000 02:00 AM

Belgium-based Tractebel confirmed that it was planning to close up shop in Kazakhstan. As of April 28, the company said in a statement, Tractebel ceased all operations in the Central Asian country. The Belgian company had been acting as operator of a 9,000 km natural gas pipeline network in southern regions of Kazakhstan and also held a controlling stake in Almaty Power Consolidated (APC), the utility that provided electricity and heat to the former capital city.
According to the statement, all Tractebel assets in Kazakhstan will be sold to Kaztransgaz, the state gas pipeline operator, for $ 100 mm. A spokesman for the company noted that managers had not yet decided how exactly to collect that sum from Kaztransgaz.
It has been speculated recently that the Kazakhstanis might offer payment in the form of gas rather than cash. The specifics of the transaction should be fixed by June 15, the Tractebel spokesman said.
According to the company's statement, the deal also provides for Tractebeland the Kazakhstani government to waive all claims against each other. The two sides have been at odds off and on since the Belgian company began working in Central Asia four years ago.

Astana has complained that the company failed to meet certain investment commitments and employed corrupt business practices; Tractebel in turn says that the Kazakhstanis sabotaged its projects, not least by ignoring a pledge to raise utility tariffs. The company says it has lost a total of $ 200 mm in Kazakhstan.
Sources have speculated that Russian Gazprom would take over the pipeline concession once Tractebel departed from the country. For his part, Kazakhstan's Prime Minister Kasymzhomart Tokayev said that Astana was discussing the matter with Gazprom. The Kazakhstani government has no objections in principle to Gazprom's involvement in the local gas market, Tokayev said.

Tractebel, which is a subsidiary of France's Suez Lyonnaise des Eaux, began working in Kazakhstan in 1996, when it won a concession to operate APC. Then in 1997, Tractebel acquired the right to run gas pipeline networks in southern Kazakhstan for 20 years. Both operations have consistently been loss-making.

Source: NewsBase
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