RusEnergy

24 April 2007 - Upstream staff - Russia won a valuable ally in the battle for the control of global gas supplies when Turkmenistan's President Kurbanguly Berdymukhamedov today personally endorsed long-term gas co-operation with Russia set out in deals running until 2028. The announcement came after talks in Moscow with President Vladimir Putin ended on a positive note for the Kremlin. "We'd like to work with you in all areas for further consolidation of our co-operation first of all relating to the distribution of Turkmen gas," Berdymukhamedov said. "Yesterday we discussed many options and you gave many good proposals and we will work with these proposals in the future," Reuters quoted him as saying. The two-day meeting focused on shared energy interests, with Russia keen to discourage Turkmenistan from shifting its vast gas exports to the European Union or a new US-backed Caspian pipeline. Berdymukhamedov assumed office earlier this year after the sudden death of Saparmurat Niyazov, who had ruled the country for 21 years. Until now, the precise political loyalties of the new leader had not been clear. Niyazov's death in December triggered a new push by the US and the European Union, keen to loosen Moscow's hold on gas supplies, to persuade Turkmenistan to ship gas past Russia via the proposed pipeline under the Caspian Sea. China is also lobbying for some of Turkmenistan's gas exports to fuel the massive expansion of its economy. But Berdymukhamedov endorsed the current export system, which sees his country's gas sold mostly to Russian gas monopoly Gazprom in a contract not set to expire until 2028. Exported Russian gas can then be sold on to European customers at a rate two and half times more than paid to Turkmenistan for its imports. Turkmenistan plans to raise sales by a quarter this year to 58 billion cubic metres and has been examining various pipeline options. In statements issued today, both sides emphasised their willingness to continue co-operation, particularly in the gas sector. "I'm glad to welcome our reliable and traditional partner. We've established pragmatic but warm relations," Putin said. "The main theme of our contact is oil and gas and yesterday we fully discussed with the president the current and future possibilities for work in this area." Russia has sought to strengthen its position as the monopoly importer of Turkmenistan's gas and to discourage the construction of a new pipeline around its territory, Deutsche UFG bank wrote in a research note.