Russia will resume Turkmen gas imports next year at less than half the volumes agreed in deals before a supply dispute between the ex-Soviet states prompted Ashgabat to develop new markets in China and Iran. Gazprom, Russia's state-run gas export monopoly, agreed on Tuesday to import up to 30 billion cubic metres of Turkmen gas under a long-term deal and said the two countries could also co-operate on a new pipeline and production ventures.
But the annual volumes are below the 50 bcm that Gazprom was buying annually before the dispute and also below some 70-80 bcm agreed in a long-term deal earlier this decade. Turkmenistan, holder of the world's fourth-largest natural gas reserves, has since moved out of Moscow's shadow with deals to supply energy to China and Iran. "If you deny a country like Turkmenistan access, then sooner or later they will find ways to circumvent your territory. It was important for Russia to bring Turkmenistan into the fold," said Alfa-Bank senior oil and gas analyst Chirvani Abdoullaev.
Turkmenistan, long dependent on Russian gas purchases, accused Moscow in April of suspending gas imports at a time when demand for gas nose-dived in Europe, and stepped up diplomacy to clinch alternative gas export routes elsewhere. Alongside oil and cotton, natural gas represents the lion's share of Turkmen budget revenues, bringing in up to $1 billion per month.
The suspension encouraged Turkmenistan to open a new gas pipeline to China this month and develop contacts with Iran. Gazprom initially blamed an explosion on a key pipeline for the halt, but later said Ashgabat should understand that it cannot sell the same volumes when demand in Europe is falling. "We plan to start supplies starting from January 1, but no later than January 10," Gazprom Deputy Chief Executive Alexander Medvedev told reporters on Tuesday. He did not specify volumes for 2010 or the price that Russia would pay.