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. Last Updated: 07/27/2016

Turkmen Deal Puts Putin on Defense

ria-novostiPutin meeting with Miller, right, and Sechin on Thursday. He told them to reach out to Central Asian gas suppliers.��
Prime Minister Vladimir Putin struck a conciliatory note in a dispute with Turkmenistan on Thursday, telling Russian energy officials to reach out to Central Asian gas suppliers just as Turkmenistan signed a tentative gas deal with Germany's RWE.

"We need to maintain close contacts and coordinate all our actions with our strategic partners. ... I mean Uzbekistan, Kazakhstan and Turkmenistan," Putin told Deputy Prime Minister Igor Sechin and Gazprom chief Alexei Miller at a meeting. "Please, don't forget about this work."

In addition to Turkmenistan, the comments appeared directed at Azerbaijan, which agreed to consider selling gas to Russia starting next year. Azeri President Ilham Aliyev was scheduled to arrive in Moscow for a two-day visit Thursday.

Turkmen President Gurbanguly Berdymukhammedov signed a memorandum of understanding with RWE chief Juergen Grossman on Thursday that could allow the company to develop the offshore oil and gas Block 23 in the Caspian Sea. The deal also raised the prospect for the company to export the gas, which could help the European Union to diversify its gas imports.

"There are number of possibilities, and one of them is to go via the Caspian Sea, which is the option we are working on," Grossman, referring to potential export routes, told reporters in the Turkmen capital, Ashgabat.

The undersea pipeline has yet to be built, a project that would require five littoral states, including Russia, to complete long-running talks on the division of the sea. If built, the pipeline would allow Central Asian gas to bypass Russia on its way to the EU and raise hope for Nabucco, another planned pipeline.

EU-backed Nabucco, where RWE is a partner, seeks to draw gas from Azerbaijan and other countries in the region. The project hasn't advanced far because of uncertainty about securing enough gas. Socar, the Azeri state oil company, agreed last month to talk about selling its gas to Gazprom starting next year.

Turkmenistan has been maneuvering between Russia, China and the West to win better terms for its gas. In a further sign of such diplomacy, Berdymukhammedov met Richard Boucher, the U.S. State Department's assistant secretary for South and Central Asian affairs, on Wednesday and said his country was open to "constructive cooperation" in areas like energy. Boucher said the United States would send a delegation to an Ashgabat gas conference on April 23 and 24, Interfax reported.

Sechin and Miller are also going, Sechin said at the meeting with Putin.

In other foreign contacts, Berdymikhammedov met with the chief of the Korean National Oil Corporation on Thursday to invite the company to invest in the energy sector.

"We will be glad if our Korean partners join in the implementation of large-scale national programs," Berdymukhammedov said.

Ashgabat last week blamed Moscow for a rupture in its pipeline to Russia, the only export route for Turkmen gas. The pipeline burst after Gazprom reduced intake at a notice that Turkmen Foreign Ministry said was too short. Prompted by a drop in demand, Gazprom and other Russian producers are also reducing production.

Russia's policy of securing as much Turkmen gas as possible is faulted because it allows Ashgabat to exert diplomatic pressure and force questionable commitments on Moscow, said Konstantin Simonov, chief of the National Energy Security Foundation, a think tank. The price of $340 per 1,000 cubic meters of Turkmen gas that Moscow paid in the first quarter of this year was too high, he said.

"The softer we appear, the harder things will be for us later," Simonov said.