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Last Updated: Tuesday, 5 September 2006, 07:19 GMT 08:19 UK
Russia reaches Turkmen gas deal
Gas production and transporting station
Experts say the deal could have implications for Ukraine
Russian gas firm Gazprom has agreed to pay much more for its gas imports from Turkmenistan, ending a dispute between the two countries.

Gazprom will pay $100 (52) per 1,000 cubic metres of gas until the end of 2008, up from the $65 it now pays.

Turkmenistan threatened to cut supplies to Gazprom unless the state-run firm agreed to its price proposals.

Gazprom exports most of the Turkmen gas it buys onto other countries in the region, principally Ukraine.

Ukraine factor

Russia and Ukraine recently reached a separate agreement about gas co-operation over the next 18 months although details about how much Ukraine will pay for Russian gas remain sketchy.

Gazprom cut off supplies to Ukraine at the start of the year during a price dispute which temporarily threatened exports to western Europe.

But Ukraine's new prime minister Viktor Yanukovych - who is close to Russian President Vladimir Putin - said last month that the two countries had agreed prices until the start of 2008.

Experts believe the Turkmen-Gazprom deal could affect Ukraine, since Gazprom has historically passed on much of its relatively inexpensive Turkmen gas onto Ukraine, therefore keeping prices down.

It exports most of its own, more expensive gas to western Europe.

Turkmenistan's President, Saparmurat Niyazov, announced the deal following a meeting with Gazprom executives in the capital Ashkabad.

Turkmenistan produces about 60 billion cubic metres of natural gas a year, with two thirds of exports going to Gazprom.




SEE ALSO
New Ukrainian PM backs gas deal
10 Aug 06 |  Business
Turkmen in gas warning to Russia
21 Jun 06 |  Business

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