Turkmenistan agrees natural gas price rise with Gazprom in advance of winter.

Gazprom chief Alexei Miller met with Turkmen President (since February 14th) Gurbanguly Berdymukhamedov (BBC biog) last week and Gazprom the Russian state-run gas monopoly. Gazprom has agreed a 30%-50% price rise with Turkmentistan for natural gas imports from Turkmenistan from 2008 onwards.

Turkmenistan's gas reserves are second largest in the former Soviet Union and Gazprom buys major portion of gas exported by Turkmenistan and trades it to other coutnries - mainly Ukraine.

Under the deal, Russia will pay $130 per 1,000 cubic meters of natural gas starting from the first half of 2008 and in the second half it will be increased to $150. (The current price is US$100 per 1,000 cubic meters - so with the decline in dollar values the rise is not as big as it might first appear).

Gazprom has also agreed Russia would buy gas from Turkmenistan at a rate determined by "market principles" from 2009. Turkmenistan's gas reserves are second in the former Soviet Union. Gazprom buys major portion of gas exported by Turkmenistan and sells it to other countries.(Let's not forget US Sec. of State Condoleezza Rice met Gurbanguly Berdymukhamedov to discuss possible US investment in Turkmenistan. 18 US government delegations – 15 from the executive branch and 3 from the Congress – have traveled to Turkmenistan over the past nine months, probing for ways to strengthen bilateral relations.

As European gas price rises rise in line with oil and EU wide trading / pricing , UK domestic gas price will rise, probably by up to 30% by mid 2008.

A £1bn pipeline connecting new gas import terminals at Milford Haven in Wales to the national transmission network opened last week although the LNG terminals still have to be completed.

South Hook, operated by ExxonMobil, is expected to begin operating next summer. BG Group, the biggest shareholder in Dragon LNG, says it expects its terminal to open in the first half of next year.