13 Aug 2009 14:07

Russia, Turkey agree to extend gas supply contract along 'western route' before Aug 2010

MOSCOW. Aug 13 (Interfax) - Russia and Turkey have agreed to extend a contract on gas supplies along the so-called western route through Ukraine, Moldova, Romania and Bulgaria before August 2010, according to an intergovernmental protocol.

The gas deliveries are covered by a contract signed in 1986 that expires in 2011.

Prime Minister Vladimir Putin said earlier that the two countries had agreed to increase gas supplies along the western route.

The Turkish press recently wrote that, during talks on the extension of the contract, Ankara intended to push for lower prices in addition to the softening of the 'take or pay' terms of the contract, under which Turkey must pay for contracted gas regardless of whether it takes the gas.

The two countries also intend to study the possibility of expanding the existing Blue Stream gas pipeline along the bottom of the Black Sea and building new gas pipelines that could transport has via Turkey to other destinations.

Russia and Turkey also plan to enhance cooperation in the construction of underground gas storage facilities and gas-run power stations as well as mineral fertilizer production.

The protocol says that Moscow and Ankara will encourage the creation of joint ventures by Gazprom and Turkish oil and gas corporation TPAO in both countries as well as third countries for the exploration, development and use of hydrocarbon fields. Turkish officials have already said that they expect to form partnerships with Gazprom and Rosneft in tenders for Iraqi fields.