Russian gas giant Gazprom and Turkmenistan have failed to reach an agreement on 2007's gas price rise and have broken off talks over the matter, Gazprom said on Thursday.

"The two sides have not reached an agreement and negotiations on this subject have therefore been interrupted," Gazprom said in a written statement which referred to talks that had been taking place in Turkmenistan.

The statement came after a meeting between Gazprom's CEO Alexei Miller and Turkmen President Saparmurat Niyazov, who had discussed terms for gas deliveries in 2007 under a long-term contract, as well as the possibility of purchases of additional gas from Turkmenistan this year.

Turkmenistan, which currently sells gas to Gazprom at 65 U.S. dollars per 1,000 cubic meters, has asked for 100 dollars from 2007, which Gazprom refused to pay.

Turkmenistan is the second-largest gas producer in the former Soviet Union countries after Russia, and its gas resources are playing an increasingly important role in the region.

Gazprom, however, controls the only export transit route for Turkmen gas.

In 2003, Russia and Turkmenistan signed a 25-year deal for cooperation in the gas sector, and last December the two countries signed a contract for Gazprom to import 30 billion cubic meters of gas in 2006 at a price of 65 dollars per 1,000 cubic meters.

Last week, Gazprom's CEO Miller visited the Turkmen capital, Ashgabat, to renew the contract, but Turkmenistan "categorically refused the offer," according to Turkmen Energy Minister Kurbanmurad Atayev.

Source: Xinhua