Russian energy giant Gazprom has reached an agreement with Turkmenistan that will see the resumption of gas supply to Russia from the central Asian republic.
Turkmenistan stopped providing gas to Russia and the Ukraine at the end of last year following a dispute over payment. Turkmenistan had said that it would only resume supplies with a 30% price increase.
The dispute was resolved after a meeting between Gazprom chief executive officer Alexei Miller and Turkmenistan President Saparmurat Niyazov. Although Gazprom refused to meet the set price demand, the Russian state-owned gas company agreed to a new payment formula. Gazprom will now pay all fees in cash.
According to a Gazprom statement, both parties have also agreed to keep on strictly abiding by the existing agreements and contracts. The 2005-2006 mutual commitments are now expected to be fulfilled without exception.
Russia and Turkmenistan originally entered into a 25-year agreement for cooperation in the gas industry in April 2003. Within the agreement, Gazexport, a 100% Gazprom subsidiary, and the Turkmenneftegaz gas transmission company, concluded a long-term Turkmen natural gas purchase and sales contract effective through the agreement expiry date.