Russia is boosting its gas imports from Turkmenistan, the chief executive of gas giant OAO Gazprom (OGZPY) said Friday, amid growing competition with the West and China for access to the ex-Soviet country's gas.
Alexei Miller made the comments in the Turkmen capital Ashgabat during a visit by Russian President Dmitry Medvedev, who Friday discussed the country's energy relations with President Gurbanguly Berdymukhamedov.
"We are in the process of increasing the volume of deliveries of Turkmen gas," said Miller. "This year they will be greater than last year."
Russia is also planning a pipeline from Turkmenistan through Kazakhstan that would consolidate its grip on gas supplies from Central Asia to Europe. Its success would undermine a Western-backed bid to reduce dependence on Moscow by pumping Turkmen gas through the planned Nabucco pipeline linking Turkey to European customers, who rely on Russia for a quarter of their gas.
After Friday's meeting Medvedev said an agreement on the pipeline "would come into force soon."
Amid increased competition for Turkmenistan's vast gas reserves, Moscow has already agreed to a hike in prices it pays to Turkmenistan to $150, up from $100 last year.
However, the price remains far lower than the price charged to European customers of almost $400 dollars a cubic meter. The Russian delegation was to discuss further price increases Friday, Miller said.
While Russia holds the world's largest gas reserves, lack of development of means it is forced to help meet rising internal demand for Russia's growing economy by supplementing its supplies with imports from Turkmenistan.
But Russia is facing increased competition in the former Soviet Union, both from Europe and from China, which recently secured a promise for 30 billion cubic meters of gas, almost half of current Turkmen production.
In April, the European Commission said it had secured a promise from Berdymukhamedov to deliver 10 bcm of gas annually from 2009, but Turkmenistan has never confirmed this.
Some analysts have cast doubt on whether Turkmenistan has much to offer the West, with most of its current production already accounted for.
Turkmenistan currently supplies 50 bcm of gas to Russia and uses 20 bcm domestically, together using the vast majority of production, which totaled 72.3 bcm in 2007.
Speaking after talks with Medvedev, Berdymukhamedov said Russia's supplies were safe.
"We confirm our attachment to the agreement on natural gas deliveries to Russia until 2025," he said.