Kyrgyzstan, Russia sign agreement on Kyrgyzgaz acquisition by Gazprom

The agreement on cooperation in transportation, distribution and sale of natural gas on the territory of the Kyrgyz Republic between the Governments of Russia and Kyrgyzstan entered into force since February 15, 2014.

Russian President Vladimir Putin signed the federal law ratifying this agreement on February 3, 2014.

The Kyrgyz gas company is transferred to Gazprom for $1. The Russian side in return guarantees investments into modernization of the gas infrastructure of Kyrgyzgaz of no less than 20 billion rubles over 5 years, according to AKI Press.

Gazprom will undertake all debts of the Kyrgyzgaz (at least $40 million) upon transfer of the Kyrgyzgaz.

The agreement has been signed for the a term of 25 years. Kyrgyzstan may buy out its assets from the Russian company upon expiry of this term.

Gazprom undertakes to ensure uninterrupted gas supply for Kyrgyzstan. Kyrgyzstan in return guarantees exclusive right to Gazprom for import of the natural gas to the country and protection of investments of Gazprom and its subsidiaries from expropriation and nationalization.