Europe's bill for Russian gas will rise by one-quarter by the end of 2008 and eventually double, Gazprom chief Alexei Miller said Thursday on a Central Asian energy tour with President Dmitry Medvedev.

Speaking after Medvedev met with Azeri President Ilham Aliyev, Miller said Moscow would begin talks on buying gas from Baku, which could undermine a Western-backed project to bypass Russia and ship fuel from the region directly to Europe.

Miller also noted he expected gas prices to rise to $500 per 1,000 cubic meters from the current $400 by the end of the year. If oil prices were to hit $250 per barrel, gas prices would hit $1,000, he said.

Analysts and oil executives have already described Miller's predictions of an oil price rally to $250 as apocalyptic. They say attempts to talk the energy prices up are harmful — especially coming from Gazprom, which supplies one-quarter of Europe's gas needs.

Miller not only repeated his prediction but said it might happen earlier than expected. "According to certain forecasts, the price of oil may reach $250 per barrel in the near future. If it does happen, the price of gas will exceed $1,000 per 1,000 cubic meters," he said.

Miller's recent bullish forecasts differ from Gazprom's usual policy of cautious and conservative estimates of gas prices, which depend on international oil-products prices and change with a lag of six to nine months.

Miller also said Russia and Azerbaijan had agreed to start talks on Gazprom's purchases of Azeri gas after agreeing on the idea in principle a month ago.

Baku is planning to supply its gas to southern Europe via Turkey, the first major project on the territory of the former Soviet Union that bypasses Russia.

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