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Gazprom to Resume Gas Purchases from Turkmenistan

Saturday 13 October 2018

(RFE/RL) — Russia’s Gazprom next year will resume imports of natural gas from Turkmenistan that it stopped three years ago, the energy giant’s chief executive has said.

In an interview with Turkmenistan’s state television channel during a visit to Ashgabat on October 9, Gazprom CEO Aleksei Miller said he expected purchases that had been suspended due to price disputes to resume at the beginning of next year. “We are talking about the resumption of purchases of Turkmen gas by Gazprom in the very near future — from January 1, 2019”, Miller said, adding that details of the new deal still must be finalized.

Russia was once the leading importer of Turkmen gas until it was displaced by China around the beginning of the decade. Relatively cheap imports of gas from Turkmenistan and other Central Asian countries enabled Russia to boost its exports to Europe.

In 2015, Gazprom announced its intention to cut imports of Turkmen gas to 4 bln m³/y, down from the 10 bln level that it had been importing since 2010. The move was followed by a complete cessation of purchases announced at the beginning of 2016, putting significant pressure on Turkmenistan’s economy, which is highly dependent on hydrocarbons as a source of hard currency.

Gas deliveries to China from Turkmenistan along the Central Asia-China pipeline are currently between 30 and 40 bln m³/y.

A large part of the revenues from Turkmenistan’s sales to China are believed to be used to pay off debt on the pipeline link, which also traverses neighbours Uzbekistan and Kazakhstan and was financed by Beijing.

Turkmenistan, which sits atop the world’s fourth-largest reserves of gas, exported similar volumes of gas to Russia before exports dropped dramatically following a mysterious pipeline explosion that occurred amid a price dispute in 2009.

The Central Asian nation stopped gas exports to Iran in January 2017, saying it was owed 1.5 to $1.8 bln for gas it had delivered to Iran. Iran, which disputes the claim, has imported Turkmen gas since 1997 to supply its northern region, especially in winter, even though it has large gas fields in the south of the country.

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