Kyrgyzstan: Manas Fuel Contract Goes to Kyrgyz-Russian Venture

A Kyrgyz-Russian joint enterprise set up specifically to corner the fuel contract at the US-operated Manas Transit Center near Bishkek will begin deliveries of aviation fuel in November.

The US Defense Logistics Agency placed its first order for fuel with Gazpromneft-Aero-Kyrgyzstan on September 26 and the company now has 45 days to deliver. Speaking at a news conference in Bishkek on September 27, US Ambassador to Kyrgyzstan Pamela Spratlen said the new contract prioritized transparency and security of supply.

“Focusing on transparency, the negotiations for this contract between Gazpromneft-Aero-Kyrgyzstan and the US Department of Defense were conducted in accordance with US contracting law and the utmost respect for US-Kyrgyz relations,” she said.

Gazpromneft-Aero-Kyrgyzstan will initially supply 20 percent of the Transit Center's aviation fuel needs, but that quantity is expected to grow rapidly, potentially reaching 50 percent or more by the end of this year. The Manas Transit Center is a logistics hub for US and NATO forces serving in Afghanistan. At peak times, operations there can consume up to 12 million US gallons of aviation fuel per month.

The exact amount of money that the fuel contract will generate for the Kyrgyz state budget is dependent on market forces, but estimates suggest that 50 percent of the contract would net Bishkek in the region of $4.5 million every month.

The US Department of Defense is expected to award in the coming days a second contract for the supply of aviation fuel to the Transit Center. This contract will award a minimum of 10 percent of the air base’s fuel requirements, or approximately 21 million gallons over a 12-month period, to an entity other than Gazpromneft-Aero-Kyrgyzstan. If Gazpromneft-Aero-Kyrgyzstan proves capable, it may supply the remaining 90 percent.

Mina Corp, an offshore-registered entity, has handled aviation fuel supply at Manas since 2006. It is unclear whether Mina is bidding to secure the 10-percent fuel-supply share. Mina and its affiliate, Red Star Enterprises, were the subjects of a US Congressional probe into contracting practices Kyrgyzstan in 2010. The investigation cleared the companies of any wrong doing but concluded they had sourced fuel from Russia using falsified end-user certificates. It also criticized the Pentagon for fostering an unnecessary layer of secrecy around fuel contracting.

Russian Ambassador to Kyrgyzstan Valentin Vlasov, who also attended the press conference, said Moscow was satisfied with the new arrangement and would guarantee supplies.