Russia and Turkmenistan cement energy ties

MOSCOW, Feb 15 (Reuters) Russia and Turkmenistan agreed today to boost energy ties and stick to existing gas export deals, a key issue for Moscow as it competes with Washington to cement better relations with Turkmenistan's new president.

Former-Soviet Turkmenistan is Central Asia's top gas exporter bordering Iran and Afghanistan. Although Russia has always seen it as a traditional sphere of influence, the United States and China pose a growing challenge.

Turkmenistan's new leader, Kurbanguly Berdymukhamedov, was sworn in yesterday vowing to follow a path set by his authoritarian predecessor Saparmurat Niyazov who died in December after more than two decades in power.

Russia is the main buyer of Turkmen gas, most of which flows through a Soviet-era pipeline, and Russian gas monopoly Gazprom, has long-term contracts to buy gas at below market prices. Gazprom, the world's No1 gas company, said later in a statement Russia and Turkmenistan were satisfied with the talks: ''The two sides confirmed their readiness to fulfil a contract on Turkmen gas deliveries to Russia, valid until 2028, and expressed the intention to develop and strengthen mutually beneficial relations on the basis of this existing long-term contract,'' Gazprom said in a statement.

Russian Prime Minister Mikhail Fradkov, speaking before talks with the new leader, hinted the Kremlin was prepared to offer new forms of cooperation.

''Gazprom's head Alexei Miller is in our delegation. He has certain proposals in his briefcase,'' Fradkov was quoted as saying by Russian news agency Interfax.

Speaking to Russian reporters, Berdymukhamedov said ''relations between Russia and Turkmenistan will continue to strengthen in all spheres, including the energy, oil and gas and humanitarian sectors.'' Western reporters were not granted access to the briefing.

The new leader was also due to hold closed-door talks with visiting Assistant U.S. Secretary of State Richard Boucher.

The United States and Europe see Turkmenistan as a potential new independent gas exporter, and have backed a plan to build a pipeline that would transport its gas under the Caspian Sea and bypass Russia.

China is also pushing a scheme for a pipeline towards its land and India is also keen for access to the gas.

Niyazov, though effectively economically dependent on Russia due to gas exports, had declared his country diplomatically ''neutral'' and minimised Turkmenistan's role in Moscow-backed regional groups like the Commonwealth of Independent States.

However, he authorised Washington to use its airspace for humanitarian flights during the war in Afghanistan that toppled the Taliban regime in 2001.

Reuters SSC DB2147