Gazprom Offers Turkmenistan Cheap Loans

Gazprom offered interest-free loans to Turkmenistan in an effort to keep the price of gas from the Central Asian country below European levels, sources with knowledge of the matter said.

Gazprom made the offer to finance Turkmen gas infrastructure projects during "difficult" negotiations on Friday, Kommersant reported, citing an unidentified company manager.

The company, which did not provide details of last week's deal, agreed to two formulas to calculate the price of Turkmen gas, Kommersant said, citing an unidentified government official.

One derives a base price by taking in equal proportions the average European wholesale price, Ukraine's domestic price and the price in southern Russia for the previous six months, the newspaper said.

The other formula takes the European wholesale price and the Ukrainian price. The final price is calculated after the deduction of transportation costs and the application of a number of coefficients, the newspaper said.

Turkmenistan has raised its price for gas supplies to Gazprom to $130 per 1,000 cubic meters in the first half of this year and $150 in the second half, up from $100 last year. It sells around 50 billion cubic meters of gas to Gazprom annually.

Bloomberg, Reuters