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Monday, June 29, 2009

China moves into Russian gas turf

ASHGABAT, Turkmenistan, June 26, 2009 (UPI) -- A 30-year natural gas deal between China and Turkmenistan may be a huge blow to Russian efforts to increase its dominance in the regional energy sector. The deal means Turkmenistan increases its gas sales to Beijing by 30 percent to 1.4 trillion cubic feet each year while work begins on a 4,000-mile pipeline between the two countries. "This agreement is very important for ensuring a stable, long-term and adequate supply of gas for this pipeline," said China's vice-premier, Li Keqiang. Moscow, previously a major purchaser of Turkmen gas, could be losing out to cash-rich China in the race to secure energy commitments in Central Asia. Turkmenistan lashed out against Russia following an explosion in April at a gas pipeline linking both countries, and it appears Moscow underestimated the fallout from that event, notes U.K. newspaper The Guardian. Meanwhile, China appears ready to invest some $3 billion to develop the South Yolotan gas field, one of the world's largest as Russian gas monopoly Gazprom announces a 30 percent cut in capital investments. Turkmenistan holds more than 700 trillion cubic feet of estimated natural gas reserves.

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