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.
