Reports: Russia, Uzbekistan to build gas pipeline

Speaking Tuesday in the Uzbek capital Tashkent, Russian Prime Minister Vladimir Putin said the pipeline will be built to "serve the growing export potential" of Uzbekistan and neighboring Turkmenistan. He added that the deal will be signed "in the near future."

The planned pipeline will pump Turkmen and Uzbek gas into Russia's pipeline system, which Russia will re-export to Europe. Between 26 billion to 30 billion cubic meters will be pumped along the route annually.

The project--which has been under discussions for several months--will strengthen Moscow's hold over Central Asian gas, and undermine Western-backed efforts for a rival trans-Caspian route.

Putin--who was accompanied by Alexei Miller, chief of OAO Gazprom state gas monopoly--held talks with Uzbek President Islam Karimov and other high-ranking officials.

In addition to talks on the pipeline, the officials also discussed payment for Uzbek gas, and Putin said in televised remarks that Russia would move toward a "European formula of pricing."

Putin's visit to Uzbekistan comes just days after British Prime Minister Gordon Brown urged the West to reduce its dependence on Russian oil and gas. Britain has been one of the most strident critics of Russia's actions in Georgia, calling for a review of the European Union's relations with Moscow.

Russia supplies the EU with a third of its oil and 40 percent of its natural gas--a dependence the European Commission says will rise significantly in the future.

Putin's spokesman Dmitry Peskov insisted that pipeline projects shouldn't be motivated by political considerations.

"Pipelines cannot be created politically. If they are created politically, they will not be economically feasible," he said during a conference call.

Russia controls westward export pipelines for gas from Turkmenistan, which has the largest reserves in the former Soviet Union after Russia and produced around 73 billion cubic meters last year. According to official figures, Russia currently buys around 70 percent of its gas, and earlier this year offered to pay for as much gas as it can sell at European prices.

Energy-hungry China has also sought a cut in Turkmenistan's gas wealth, agreeing to a deal to build a natural gas pipeline that is to come on line in 2009. Turkmenistan recently agreed to boost the agreed exports to 40 billion cubic meters annually.

Meanwhile, Russia's largest independent oil producer Lukoil says it plans to produce 12 billion cubic meters of gas per year at Uzbekistan's Kandym and Gissar fields.