Medvedev goes to Turkmenistan for gas talks
BAKU, July 4 (Reuters) - President Dmitry Medvedev goes to Turkmenistan on Friday, part of a visit to three ex-Soviet states aimed at heading off a European challenge to Russia's domination of Central Asian gas supplies.
Turkmenistan is the biggest exporter of natural gas in Central Asia, the region which exports about 70 billion cubic metres of gas (bcm) each year, about the same as Italy's annual consumption.
But the fuel is all shipped to Russia, with no pipelines to export it directly to the European Union.
Turkmenistan is likely to be the focus of Medvedev's diplomatic drive and the new Russian president will have to use all his skills to persuade President Kurbanguly Berdymukhamedov to resist Western temptations and stick to Russian pipelines.
In the 15 years after Turkmenistan became an independent state from the Soviet Union, autocratic President Saparmurat Niyazov kept the country in isolation, while exporting all its natural gas to Russia via a Soviet-era pipeline network.
But since Niyazov's death in 2006, Western officials have worked hard to persuade his successor Berdymukhamedov to consider shipping some gas to Azerbaijan via a pipeline across the Caspian Sea.
Under a European plan, the Turkmen gas would then feed the Nabucco pipeline, an EU-backed project which, if it is built, will link Central Asian producers to Europe bypassing Russia.
Last year, Moscow agreed with Turkmenistan, Kazakhstan and Uzbekistan to upgrade the Soviet-era gas export network in a deal it thought would make rival projects obsolete.
But since then, Berdymukhamedov has shown interest in other projects including the Trans-Caspian pipeline, a proposed pipeline to China and another to the Indian Ocean.
In an effort to persuade Turmkenistan to stick to old alliances, Russia has agreed to raise the knockout price it used to pay for Turmken gas to international market levels.
But talks on prices are tricky and still unresolved.
Russian energy officials say the planned trans-Caspian pipeline lacks geological justification and could be an environmental risk. Another risk, they say, is the unending argument about the status of the Caspian among coastal states.
Medvedev on Thursday held talks in another ex-Soviet Caspian state Azerbaijan -- a possible hub between the Trans-Caspian pipeline and Nabucco.
The talks ended in an agreement by Azerbaijan to discuss selling its gas to Russia, which could undermine the Nabucco project.
"In the course of talks, Gazprom and Azeri colleagues decided to start talks .... on the conditions for buying Azeri gas," Gazprom (GAZP.MM) CEO Alexei Miller told reporters in Baku after Medvedev's talks with Azeri President Ilham Aliyev.
After Turkmenistan, Medvedev will fly to Kazakhstan, a key player in the region and Moscow's strong ally.
