Russia, Turkmenistan end gas dispute

MOSCOW : Turkmenistan and Russia have agreed a resumption of gas exports from the Central Asian state which were halted in April, the Kremlin said on Wednesday, in what analysts said was a victory for Moscow.

"A political agreement has been reached on the resumption of supplies." Kremlin spokeswoman Natalya Timakova told reporters.

She said the agreement had been clinched as a result of a meeting last month between Russian President Dmitry Medvedev and his Turkmen counterpart Gurganbuly Berdymukhamedov.

Russian state-controlled energy giant Gazprom, which buys the Turkmen gas for further export to Europe, is currently working on the technical details about resuming the supplies, she added.

A spokesman for Gazprom said the company wouldn't comment. Representatives for both the Turkmen Foreign Ministry and state energy company Turkmengaz also declined comment.

A pipeline blast in April virtually halted Turkmen gas exports to Russia at a time when Moscow was seeking to purchase less gas from Ashgabat owing to lower demand in Europe, severely straining ties.

In an effort to mend fences, Medvedev met with Berdymukhamedov on September 12-13 in Turkmenistan.

According to analysts' estimates, the rupture of the pipeline has caused Ashgabat to lose around a billion dollars a month in lost exports.

Analysts said on Wednesday that Russia emerged a clear winner after the months of talks, pointing to the fact that Russia would probably buy 30 percent less gas next year, compared to the purchases before the pipeline rupture.

"It is still hard to be certain about gas purchases from Turkmenistan in 2010, but in our view they are likely to be in the range of 10-30 billion cubic metres," VTB Capital said in a note to clients earlier this week.

A gas analyst, speaking on condition of anonymity, said Russia's gas purchases from Turkmenistan were "one of the pressure levers" for Gazprom to use against the EU-backed Nabucco pipeline.

The analyst estimated that Gazprom purchases from Turkmenistan were at an annual 45 billion cubic metres before the conflict.

VTB Capital earlier this week said gas supplies from Turkmenistan to Russia would start either in October or November. But the bank was then forced to correct its statement.

Ana Jelenkovic, a London-based analyst with political risk consulting firm Eurasia Group, agreed Russia was a winner in the energy conflict with Turkmenistan.

"The fact that Turkmenistan was losing a billion dollars a month since April and Russia didn't need this gas and Russia still doesn't need this gas, says that Russia comes out on top."

She said a mixture of "needing financial resources, coupled with perhaps running out of storage, coupled with (the fact that) going into winter months the government always needs more money for domestic heating" has made Turkmenistan more cooperative.

Turkmenistan accused Russia of abruptly decreasing the volumes of Turkmen natural gas, causing the pipeline to rupture, allowing Russia to drastically scale down its imports of Turkmen gas at a time when demand for gas in Europe fell.

Russia dismissed the incident as a technological mishap but analysts say exports of the Turkmen gas have not restarted, suggesting Russia wanted Turkmenistan to lower its gas prices.

Berdymukhamedov has expressed readiness to supply Turkmen gas to the EU-led Nabucco pipeline, a long-delayed project designed to supply the bloc with gas from the Caspian Sea region while bypassing Russia.