Russia, Turkmenistan extend Caspian gas link freeze-paper

MOSCOW Sat Oct 23, 2010 9:57am BST

MOSCOW Oct 23 (Reuters) - Russia and Turkmenistan have decided not to revive a mothballed Caspian gas pipeline as demand for the fuel in Europe is yet to recover, Kommersant business daily reported on Saturday.

Russia, China and the European Union are all vying for the benevolence of Turkmenistan, holder of the world's fourth-largest natural gas reserves, to secure a strong foothold in the energy market.

Earlier this week, Russian President Dmitry Medvedev visited Central Asia's largest gas producer but failed to clinch any concrete deal, the paper said.

According to Kommersant, Igor Sechin, Russia's top energy official, who was a part of the delegation, said it was decided to further put off construction of the planned Caspian pipeline.

Russia, Turkmenistan, Kazakhstan and Uzbekistan agreed to build the link along the Caspian Sea coastal line that would allow Moscow to keep regional gas flows under its control, but its construction has yet to begin.

Europe's hopes for diversifying its supplies rest largely on the planned Nabucco natural gas pipeline from the Caspian Sea region to Europe bypassing Russia.

Russia is also harbouring another ambitious gas project, South Stream, which is designed to bring gas on the Black Sea bed to the south of Europe.

On Friday, Turkmenistan President Gurbanguly Berdymukhamedov said his country is eager to export more gas via Russia, only months after a pricing row shut deliveries and prompted the country to seek closer energy ties with China. [ID:nLDE69L0XT]

(Reporting by Vladimir Soldatkin; editing by Sugita Katyal)

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