OREANDA-NEWS. December 22, 2009. In Ashgabat amendments and supplements to the long-term gas purchase and sale contract were signed in the presence of Dmitry Medvedev, President of the Russian Federation and Gurbanguly Berdymukhammedov, President of Turkmenistan.

Pursuant to the document, the purchase and supply of Turkmen gas are to be resumed starting from January 1, 2010 in the annual amount of up to 30 billion cubic meters. According to the accords reached, the price formula will fully depend on the European gas market conditions.

Based on the negotiation results, an agreement was reached to jointly implement the projects on the Pre-Caspian gas pipeline construction and the East-West gas trunkline. In addition, the parties discussed the prospects for joint hydrocarbons development in the Caspian Sea shelf.

The meeting participants underlined the constructive nature of the bilateral cooperation and expressed confidence that the mutually beneficial long-term partnership in the energy sector would be further strengthened.
Background

Russia and Turkmenistan entered into the 25-year Agreement of Cooperation in the gas industry on April 10, 2003. Under the Agreement, Gazprom export and Turkmenneftegaz concluded a long-term contract to purchase and sell Turkmen natural gas throughout the period of the Agreement.

The East-West gas pipeline is meant to become the major link with the Turkmen gas transmission system being shaped, which will assure natural gas transmission in various directions. In addition to its export function, the East-West gas pipeline will be able to secure sustained gas supplies to population centers of Turkmenistan.

On May 12, 2007, the Presidents of Russia, Kazakhstan and Turkmenistan signed a Joint Declaration to build the Pre-Caspian gas pipeline.

On December 20, 2007, the Governments of Russia, Kazakhstan and Turkmenistan entered into the Agreement on the Pre-Caspian Gas Pipeline Construction.

The gas pipeline construction is targeted at transporting natural gas from fields in the Caspian Sea and other locations in Turkmenistan and the Republic of Kazakhstan to the Russian Federation.

On July 25, 2008 the Agreement was signed on Gazprom’s participation in investment projects in the gas industry of Turkmenistan. The Agreement stipulates building up the capacity of the Turkmen section of the Pre-Caspian gas pipeline up to 30 billion cubic meters.

The Pre-Caspian gas pipeline, circa 1,700 kilometers long, will stretch over 500 kilometers across Turkmenistan and some 1,200 kilometers across Kazakhstan.