UPDATE 1-U.S. urges Turkmenistan to diversify gas exports

(Adds comment on proposed pipeline via Afghanistan)

By Marat Gurt

ASHGABAT, Feb 29 (Reuters) - A senior U.S. official urged Turkmenistan to find other routes, apart from Russia, for its natural gas exports and called the Nabucco project skirting Russia a viable option for Central Asia's largest gas producer.

Turkmenistan exports most of its gas through Russian gas pipeline monopoly Gazprom (GAZP.MM), which resells it to Europe at higher prices. But the West wants it to diversify exports away from Russia, Turkmenistan's former Soviet overlord.

"We believe it is highly desirable for Turkmenistan to have alternative export possibilities, and Nabucco might be one of those," Steven Mann, the Eurasian Energy Diplomacy Coordinator at the U.S. Department of State, said on Friday.

"Nabucco is progressing very well," he told Reuters on a visit to the Turkmen capital, Ashgabat.

The West has been courting Turkmenistan since President Kurbanguly Berdymukhamedov, seen as a reformer, came to power after the 2006 death of absolutist leader Saparmurat Niyazov.

Russian President Vladimir Putin this week called Nabucco, which aims to carry gas from the Caspian basin via Turkey and the Balkans to central Europe, a waste of money. He said it was losing out to the competing South Stream project, backed by Moscow.

South Stream, supported by Italy's Eni (ENI.MI), aims to link Gazprom's Siberian gas fields to western Europe.

"There is a big difference between private sector pipelines and pipelines that are the subject of declarations," Mann said, commenting on Putin's statement. "Serious international companies don't work on the basis of declarations."

Mann said Europe would prefer a pipeline not controlled by Gazprom. "Right now Gazprom dominates imports from the East and many Europeans have told us that they would to like to see more competition, not less competition," he said.

AFGHANISTAN ROUTE

Apart from Nabucco, Turkmenistan has expressed interest in a separate pipeline to Pakistan and India through Afghanistan -- a project originally supported by Washington but suspended due to military conflict in Afghanistan.

"I have not seen any real commercial interest in the Afghan pipeline so far," Mann said.

Before joining Nabucco, Turkmenistan needs to increase its gas output, Mann said.