Gazprom CEO Alexey Miller in Turkmenbashi, Turkmenistan, May 12, 2007
Photo: Dmitry Azarov
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Gazprom to Pay More for Turkmen Gas
Gazprom has agreed to raise the price it will pay for natural gas in Turkmenistan next year to $130 per 1000 cu. m. in the first half of next year and $150 in the second half. In 2009, Gazprom and Turkmenistan will convert to “market” prices, based on average prices for the previous half year in the EU, Russia and CIS. That may mean even greater price hikes. The average price for gas in Russia for 2009 will be $80-90, while the average price in the EU at that time will be $360-380. In return for all that, Gazprom will retain its status as main gas buyer in the country through 2028, in the face of Western clamoring for access to Turkmen resources.
The late Turkmen president Saparmurat Niyazov raised the price of gas to Russia from $65 to $100 last year. That price was to hold until 2009. Gazprom agreed to the latest change in prices with remarkable willingness. New Turkmen President Kurbanguly Berdymukhammedov has been holding negotiations with a number of European and American officials on opening his country up to the world.
At the 62nd General Assembly of the UN in September, he stated that the purchase price of natural gas should be raised 50 percent. U.S. Secretary of Energy Samuel Bodman and European Commissioner for Energy Andris Piebalgs later expressed support for Berdymukhammedov's proposal. It was after that that the Turkmen president informed Russia of the price change.
Russia resells Turkmen gas to Ukraine. Russia's main concern is not the economics of its contract with Turkmenistan, but controlling its natural gas. Gazprom CEO Alexey Miller stated in Ashgabat yesterday at the contract signing that the agreement would last until 2028. Russia will buy up to 80 billion cu. m. of natural gas per year from Turkmenistan. This year, Turkmenistan will produce only 70 billion cu. m. of gas. It plans to produce up to 250 billion cu. m. annually by 2030.
www.kommersant.com
All the Article in Russian as of Nov. 28, 2007
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