Oil Report

Russia may resume Turkmen gas import Oct-Nov-VTB

MOSCOW, Oct 5 (Reuters) - Russia's Gazprom GAZP.MM is likely to resume gas purchases from Turkmenistan, halted in April after a pipeline blast, this or next month, VTB Capital investment bank said after a meeting with Gazprom's management.

Supplies from Turkmenistan, Gazprom’s main source of natural gas in Central Asia, were suspended in April after an explosion at the pipeline, which connects Russia and the former Soviet Union satellite.

The link has been repaired, but supplies were never restored as Moscow sought better terms for the purchases.

“Gazprom expects to resume purchases of Turkmen gas in October-November this year, but does not have a clear view on 2010 volumes,” VTB Capital analysts wrote in their note after the meeting.

Before the pipeline blast Gazprom used to import about 50 billion cubic metres of Turkmen gas a year, but due to the economic downturn and subsequent drop in demand it was unlikely to return to this kind of level of volumes.

A market source told Reuters Gazprom will likely buy up to 30 billion cubic metres of Turkmen gas next year.

Gazprom declined to comment on the report.

Alexander Medvedev, the head of Gazprom’s export unit, told Reuters last month, he expected the two countries to soon reach an agreement on the resumption of Turkmen gas flows.[ID:nLB644633]

But soon after his comments Russian and Turkmen leaders failed to set a timeframe for the return of Turkmen gas supplies to Russia. [ID:nLD46484] (Reporting by Vladimir Soldatkin; editing by William Hardy)