Russia resumes gas imports from Turkmenistan

On December 22 in Ashgabat, Russian President Dmitry Medvedev and his counterpart in Turkmenistan, Gurbanguly Berdymukhamedov, witnessed the signing of documents on bilateral gas trade and transportation. The documents mark the end of Russia’s punitive, nine-month halt of gas imports from Turkmenistan. The halt inflicted severe losses on Turkmenistan’s revenues.

However, Russia’s monopsony is now lost thanks to the opening of Turkmenistan-China and Turkmenistan-Iran pipelines in December. Russia is returning in a diminished role to an intensifying contest for Turkmen gas.
Gazprom vice president, Aleksandr Medvedev, and Turkmengaz

chairman, Nury Muhammedov, signed the sale-and-purchase agreement in the presence of the two heads of state. According to a subsequent announcement by Gazprom spokesman, Sergey Kupryanov, deliveries would start on January 9, rather than January 1.

Under the agreement, Turkmenistan would deliver “up to” 30 billion cubic meters (bcm) annually to Russia from 2010 onward. However, the agreement does not specify the delivery volume for 2010, let alone subsequent years. Nor does the agreement envisage any timeframe for reaching the nominal 30 bcm target. According to Russian business press reports, Gazprom’s 2010 budget has earmarked funds for purchasing only 10.5 bcm of Turkmen gas this year.

Gazprom’s purchase price for Turkmen gas is not officially disclosed. The new agreement pegs that price to the oil-products basket, potentially approximating European netback prices for Russian-delivered gas. According to unofficial reports, Gazprom’s purchase price is anticipated to range from US$220 to $250 per one thousand cubic meters of Turkmen gas during 2010.

Asia Times