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Russia's Gazprom Files Lawsuit Over Turkmen Gas Supply Contract

A general view shows the headquarters of Gazprom on the day of the annual general meeting of the company's shareholders in Moscow, Russia.

Russian gas company Gazprom said Friday it had lodged a case against Turkmenistan's Turkmengaz at the international arbitration court in Stockholm over the price in a supply contract.

The move came two weeks after Turkmenistan accused Gazprom of not paying for gas supplied from the Central Asian country this year.

Gazprom, the world's top natural gas producer, buys gas from Turkmenistan for its own use or resale. But the amount has fallen this year as relations between Moscow and the reclusive former Soviet Union republic are increasingly strained by a competition to supply the large Chinese gas market.

A spokesman for the Russian company said: "A lawsuit has been filed in Stockholm. The demand — a revision of prices."

The spokesman declined to elaborate.

Earlier on Friday, Forbes magazine reported that the purchasing price stood at $240 per 1,000 cubic meters — lower than the price Gazprom charges its customers in Europe.

Turkmenistan so far has the upper hand in the fight for the Chinese market, supplying around 30 billion cubic meters (bcm) of gas annually with plans to double that volume by 2020.

Gazprom plans to start gas sales to China in 2018, gradually increasing flows to 38 bcm per year from east Siberia. Talks over gas flows to China from west Siberian fields have so far failed to gain traction.

The state-controlled company announced at the end of last year that it would cap its purchases of Turkmen natural gas at 4 bcm this year, way below its imports of around 11 bcm in 2014.

In 2008, Gazprom bought more than 40 bcm of the fuel. In 2009-2014, Russia's annual gas imports from Turkmenistan stood at 10-11 bcm.

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