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Azerbaijani gas price for Turkey to be likely re-considered: Azerbaijani President

Oil&Gas Materials 13 May 2009 15:38 (UTC +04:00)
Azerbaijani gas price for Turkey to be likely re-considered: Azerbaijani President

Azerbaijan, Baku, May 13 / Trend /

The contract on sale of the Azerbaijani gas produced in the Shah Deniz field envisages re-consideration of its cost, Azerbaijani President Ilham Aliyev said at a joint news conference with Turkish Prime Minister Recep Tayyip Erdogan aired lively via the CNN Turk TV channel.

"Under the contract, prices for the Azerbaijani gas depend on world oil prices. It would be incorrect to connect the issue [re-consideration of the gas prices for Turkey] with the situation that may occur, is occurring or will not occur in the region," Ilham Aliyev said.

The Turkish prime minister said at the news conference that price for the Azerbaijani gas will be re-considered during the negotiations between the two countries' energy agencies.

Turkey buys Azerbaijani gas at $120 for 1,000 cubic meters. The contract also stipulates that the gas price can be considered a year after the supplies is launched. So, new prices (which the sides are negotiating) will be applied beginning from April 15, 2008.

Under the contract, 6.6 billion cubic meters of gas will be transported to Turkey via Baku-Tbilisi-Erzurum per year as part of the Shah Deniz-1.

Shah Deniz partners plan to achieve this volume in 2009.

The contract on Shah Deniz off-shore field development was signed on 4 June 1996. The sides to the contract are ВР (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%). Field's reserves are estimated at 1.2 trillion cubic meters of gas.

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