Russia deal on Caspian gas pipeline

The leaders of Russia, Turkmenistan and Kazakhstan agreed yesterday to build a new natural gas pipeline around the Caspian Sea, a move that bolsters Russia's dominance over the region's gas exports.

The new pipeline and an accompanying deal to upgrade existing Soviet-era infrastructure deliver a blow to US, European and Chinese hopes of prising the flow of Central Asian gas out of Russian hands.

Although all three former Soviet republics sought to play down the diplomatic implications of the pipeline, it comes at a time of increased Western anxiety about Russia's use of its vast energy resources for political ends, a charge Moscow denies.

The agreement was reached at a summit of the three states in the Turkmen Caspian port of Turkmenbashi. Russian President Vladimir Putin said the deal meant "more supplies of energy resources to Europe and the world's markets".

In its first stage, the pipeline will deliver 10 billion cubic metres (bcm) of gas per year by 2009-2010, Russian Energy Minister Viktor Khristenko told reporters. Including the infra-structure upgrade, deliveries to the Russian border will rise to 90 bcm.

While Turkmen President Kurbanguly Berdymukhamedov said plans for a rival US-backed trans-Caspian pipeline that by-passes Russia had "not been completely dropped", Khristenko said he believed there was now little chance of it going ahead.

The three states issued joint declarations saying they would sign a treaty by September on building the new pipeline and would work with Uzbekistan to improve existing Sovietera Central Asia/Centre pipelines.