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Gazprom agrees to pay double for Turkmen gas

By M. Alkhazashvili
Translated by Davit Kipiani
Wednesday, July 30
Russian energy company Gazprom will pay double the amount it currently pays for Turkmen gas after a deal signed last week, officials have announced.

The agreement will see two formulas used to calculate the price of gas, which will go up from around USD 140 per thousand cubic meters to around USD 260.

The Russian newspaper Kommersant reported that during last week’s negotiations Gazprom offered Turkmenistan interest-free loans to keep the price less than European levels.

In March Gazprom agreed to pay “European prices” for Central Asian gas by next year, a deal which came shortly after the Russian company agreed to up its payment for Turkmen gas to USD 150 per thousand cubic meters by mid-2008.

The Gazprom move is seen by analysts as an attempt to increase Russia’s grip on Central Asian gas. Europe is vying for Central Asian energy to fill the EU- and US-backed Nabucco pipeline while China has already begun construction on the China–Central Asia gas pipeline that is scheduled to go online in 2009.

Earlier this month Russian President Dmitry Medvedev touched down in Ashgabat for gas talks with his Turkmen counterpart Gurbanguly Berdimuhammedov, but few details about the meeting emerged at the time.