Gazprom breaks with Turkmengaz and ups gas imports from Uzbekistan

GazpromGazprom has announced that it will be increasing the volume of gas it imports from Uzbekistan this year after terminating its contract with Turkmengaz. The move comes after a long-running dispute with Turkmenistan’s state-run gas supplier over pricing that culminated in the Russian energy giant filing a lawsuit with the arbitration courts in Stockholm earlier in the year. 
TurkmengazRussia and Turkmenistan signed a 25-year agreement back in 2003 that saw Gazprom buy around 42 bcm a year in the mid-2000s. After the financial crisis of 2008, Gazprom repeatedly asked for a pricing review and that figure had dropped to between 11 and 12 bcm by 2009. Last year, Gazprom gave notice that it would be reducing annual purchases of Turkmengaz to 4bcm. Turkmengaz is blaming the situation on “the changed conditions in the international gas market,” but that it was prepared to negotiate with Gazprom “on a wide range of issues.”
The dispute is almost certainly a manifestation of a shift in the balance of the Eurasian gas market and Turkeministan’s ever-decreasing dependence on Russia for its hydrocarbon exports. In recent years, Turkmenistan has built up a booming business with China and now sends 30 bcm of gas eastward each year with more capacity to be added by way of new CNPC-funded pipelines. The government in Ashgabat is also looking to the West and last month announced that it had completed construction of the East-West pipeline linking its its eastern gas fields to the Caspian Sea. With an annual capacity of 30 bcm, the 773km pipeline is seen as key to Turkmenistan’s ambitions to increase gas exports to Europe.

Source: Rosbalt