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Gazprom signs five-year contract with Turkmenistan

July 04, 2019/ 08:32

Baku. Russia's Gazprom has signed a contract to purchase natural gas from Turkmenistan's Turkmengaz state concern for a period of five years (until June 30, 2024), Trend reports referring to the Russian company.

According to the contract, the volume of gas supplies from Turkmenistan to Gazprom’s portfolio will amount to 5.5 billion cubic meters per year. Gazprom resumed purchasing Turkmen gas in April 2019.

The volume of deliveries under the short-term contract from April 15 to June 30 amounted to 1.2 billion cubic meters of gas.

Until 2009, Gazprom was the biggest buyer of Turkmen gas, purchasing up to 40-42 billion cubic meters a year. Despite the contractual arrangements, at first the volumes decreased to the level of 10-11 billion cubic meters per year within five years. The annual volume decreased 2.5 times and amounted to four billion cubic meters in 2015.

The Russian company explained that the reduction in the volume of purchases was related to the decreased demand in Europe and Ukraine. Due to the fall in export prices for gas, which are tied to constantly falling oil prices, the established price for Turkmen gas at $240 per 1000 cubic meters has ceased to suit the Russian side.

Turkmenistan transports its gas to Russia via the Central Asia-Center (CAC) pipeline, built in Soviet times and monopolized by Gazprom.

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