Pipeliners

April 16, 2009 - (AP by Alexander Vershinin) - ASHGABAT, Turkmenistan — German energy company RWE AG signed a tentative deal Thursday with Turkmenistan that could see it exporting natural gas from the Central Asian nation to Europe. The memorandum of understanding marks a significant breakthrough in Western efforts to diversify gas deliveries away from Russia, which is currently embroiled in a diplomatic row with Turkmenistan over a pipeline explosion last week. RWE chief executive Juergen Grossmann said the long-term deal will also give his company development rights to an offshore field in the Caspian Sea. "They will work on developing oil and gas resources on the 23rd block of Turkmenistan's Caspian shelf," Turkmen President Gurbanguli Berdymukhamedov said after meeting with Grossmann in the Turkmen capital, Ashgabat. European plans to reduce dependence on Russian gas have focused on building a pipeline across the bottom of the Caspian Sea, an option that is being studied by RWE. "There are number of possibilities, and one of them is to go via the Caspian Sea, which is the option we are working on," Grossmann said. RWE is a partner in the international consortium hoping to build the EU-backed Nabucco pipeline, which is aimed at bypassing Russia by transporting from Azerbaijan, through Turkey and onward to Europe. Progress on the pipeline has faltered over doubts about its financial viability, but guarantees of Turkmen gas supplies would improve the project's chances. In 2007, the Kremlin sought to undercut Nabucco by signing a declaration on the construction of a 1,100-mile (1,700-kilometer) pipeline along the Caspian Sea shore that would run from Turkmenistan through Kazakhstan and into Russia's network of pipelines to Europe. Gazprom hopes the pipeline will supplement current gas deliveries from Turkmenistan by around 30 billion cubic meters. Relations between Turkmenistan and Russia have turned sour in recent days, however, with Turkmenistan accusing Gazprom of causing a pipeline blast on its border with Uzbekistan last week that shut off the Central Asian country's gas exports. On Monday, Berdymukhamedov charged the company with committing "technological errors" that triggered the blast and invited independent experts to investigate the incident.