Source AP ©

Turkmenistan to sign gas pipeline deal with Russia and Kazakhstan

Turkmenistan, Russia and Kazakhstan are going to sign an agreement to construct a natural gas pipeline along the Caspian Sea coast.

The statement came after months of uncertainty. After a preliminary agreement was formalized at a signing ceremony attended by the presidents of the ex-Soviet republics in May, the deal was stalled by disagreements on the price of gas supplies.

Late last month, Russia's state-controlled monopoly OAO Gazprom gave in to Turkmen price demands and agreed to pay US$130 (89 EUR) per 1,000 cubic meters of natural gas in the first half of 2008 and US$150 (104 EUR) in the second half.

Turkmen President Gurbanguli Berdymukhamedov and Russian Industry and Energy Minister Viktor Khristenko discussed the pipeline during talks in the Turkmen capital Ashgabat, Berdymukhamedov's office said.

"It was agreed that this important trilateral document will be signed Dec. 20 in Moscow," it said in a statement.

News that the deal will soon be sealed will likely disappoint the U.S. and the European Union, which have been lobbying for a rival pipeline to be built under the Caspian Sea, bypassing Russia. Berdymukhamedov has expressed interest in multiple export routes.

Russia controls westward export pipelines for gas from Turkmenistan, which has the largest reserves in the former Soviet Union after Russia.

Khristenko told Berdymukhamedov the pipeline would have an annual capacity of 20 billion cubic meters, the statement said but it gave no timeframe. Khristenko had said in May that the figure could eventually reach 30 billion cubic meters.

Russian President Vladimir Putin spoke with Berdymukhamedov by phone on Tuesday to discuss the agreement on the pipeline, the Kremlin said in a statement. It gave no date for a signing.