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Turkmenistan threatens to cut off gas to Russia in contract spat

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MOSCOW, June 29 (RIA Novosti) - Turkmenistan said Thursday it would cut off supplies of natural gas to Russia if no new gas deal with a new price of $100 per 1,000 cubic meters were signed by September.

During three-hour negotiations in Turkmenistan, Turkmen President Saparmurat Niyazov and Russian natural gas giant Gazprom's head Alexei Miller failed to agree on the new gas price. In 2006, Turkmenistan has charged Russia $65 per 1,000 cu m.

"By the end of September, we will fulfill the earlier concluded contract to supply 30 billion cu m of Turkmen natural gas to Gazprom in the first half of 2006," said Turkmenistan's state news agency TDH. "Then we will stop gas supplies to Russia due to the lack of new contract."

At the talks, Niyazov and Miller discussed supplies of 25 bln cu m of gas in the second half of 2006 and 70 billion cu m in 2007.

"Turkmenistan said it was ready to sign a contract to supply 25 bln cu m in the second half of 2006 for $100 per 1,000 cu m and 50 bln cu m in 2007 for the same price," the agency said.

The Turkmen side said these terms were in full accordance with a bilateral 25-year gas agreement signed in 2003.

However, Gazprom said earlier Thursday that Turkmenistan had confirmed its intention of supplying Gazprom with 30 bln cu m of natural gas at $65 per 1,000 cu m and had offered extra supplies at $100.

"The sides reiterated their commitment to honoring their obligations on earlier contracts," Gazprom said in a news release following the talks in Turkmenistan Thursday.

The parties also discussed supplies in 2007 under a long-term deal, and possible extra supplies in 2006.

But no compromise was reached on Turkmenistan's proposal that the tariff be raised to $100, and the negotiations stalled, Gazprom said.

Ukraine's national oil and gas company Naftogaz also struck a deal with Turkmenistan for 2006 in December 2005. Under the contract, Turkmenistan is obliged to supply Ukraine with natural gas for a price of $50 per 1,000 cu m in the first half of 2006 and $60 in the second half. However, Ukraine has received no natural gas from Turkmenistan this year.

On Thursday, a 20-people Ukrainian delegation led by Fuel and Energy Minister Ivan Plachkov arrived in the Turkmen capital Ashkhabad for gas talks. The sides are expected to focus on payments for the gas that Turkmenistan had provided earlier and on gas supplies in the second half of 2006 and in the future.

The talks will start Friday.

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