Russia's Medvedev in Turkmenistan to talk gas

By Oleg Shchedrov

ASHGABAT (Reuters) - Russian President Dmitry Medvedev arrived in Turkmenistan on Friday for two days of intense gas diplomacy aimed at heading off a European challenge to Moscow's domination of Central Asian gas supplies.

Turkmenistan, the biggest gas producer in Central Asia, has been emerging from global isolation since President Kurbanguly Berdymukhamedov came to power in late 2006 promising reform.

Under Soviet rule until 1991, Turkmenistan is now at the centre of energy diplomacy as Europe and Russia vie for control over pipeline routes to deliver its gas to global markets.

As Medvedev sat down for talks with the Turkmen leader to persuade him to resist Western temptations and stick to Russian pipelines, a senior Russian energy official said Moscow was determined to grab a larger share of Turkmen gas.

"We plan to increase purchases of gas (in Turkmenistan)," Gazprom chief executive Alexei Miller told reporters.

In an effort to persuade Turkmenistan to stand by old alliances, Russia has agreed to raise the knockout price it used to pay for Turkmen gas to international market levels from 2009 but the two have yet to agree on the pricing details.

"We will discuss financial terms of supplies that will be based on the market price," Miller said.

Medvedev arrived in the Turkmen capital Ashgabat from Azerbaijan on a tour of Caspian energy producers that will also take him to Kazakhstan -- the region's biggest economy and oil producer -- on Sunday.