Headed by Alexey Miller, Chairman of the Gazprom Management Committee, a Gazprom delegation paid a working visit to Turkmenistan. As part of the visit Alexey Miller met with Turkmen President Gurbanguly Berdymukhammedov.

During the meeting an agreement was signed on the principles for the Turkmen gas price formation. Alexey Miller noted: “The agreement providing for price formation based on the market principles within the frame of the long-term contract for natural gas purchase from Turkmenistan became another meaningful step towards the development of cooperation”.

An agreement was signed on Gazprom’s participation in investment projects in the natural gas industry of Turkmenistan. Alexey Miller said: “An agreement was reached on funding and constructing new gas mains from the eastern part of the country by Gazprom, developing field infrastructure and increasing the capacity of the Turkmen section of the Precaspian gas pipeline up to 30 bcm. Gazprom will take part in the construction.”

During the meeting the parties agreed to erect the buildings for a Gazprom’s representative office and a branch of the I. M. Gubkin Russian State Oil & Gas University in Ashgabat.

Summarizing the meeting, the parties noted that the partnership of Gazprom and Turkmenistan had been promoted to a principally new stage and expressed their confidence in the successful implementation of all the joint projects.

Background:

Russia and Turkmenistan entered into a 25-year Agreement of Cooperation in the Gas Industry on April 10, 2003. Under the Agreement, Gazprom export (Gazprom’s wholly owned subsidiary) and Turkmenneftegaz gas transmission company concluded a long-term contract to purchase and sell Turkmen natural gas throughout the period of the Agreement.

Turkmen gas is supplied through the Central Asia –Center system of transit gas pipelines crossing Uzbekistan, Kazakhstan and Russia. In accordance with inter-governmental agreements Gazprom transits Turkmen gas via Russia to Ukraine. Furthermore, under mid-term contracts Gazprom serves as an operator of Turkmen gas transit across Uzbekistan and Kazakhstan.

On May 12, 2007 the Presidents of Russia, Kazakhstan and Turkmenistan signed a Joint Declaration to build the Precaspian gas pipeline.

On December 20, 2007, the Governments of Russia, Kazakhstan and Turkmenistan entered into the Agreement on the Precaspian Gas Pipeline Construction.

The gas pipeline construction is targeted at transporting natural gas from fields in the Caspian Sea and other locations in Turkmenistan and the Republic of Kazakhstan to the Russian Federation.

The volume of gas transportation through the Precaspian gas pipeline is projected to make up:

- up to 10 bcmpa from Turkmenistan;

- up to 10 bcmpa from Kazakhstan.