SOCAR not demands tariffs equal to Russian gas prices from Turkey: official
Azerbaijan, Baku, June 3 / Trend , E. Ismayilov/
There is no significant progress in talks with Turkey on value of Azerbaijani gas exported to Turkey as a part of the Shah Deniz gas and condensate field, SOCAR senior official said.
"The only progress is that Turkish Energy Ministry and Botas display constructive position. We have always held constructive position. So, success of talks depends mainly on Turkish side," he said.
Major approach in talks is built not on increasing prices, but reaching tariffs fair for Azerbaijan.
SOCAR does not require Turkey tariffs equal to Russia's gas prices, because the company considers them excessive. A positive result for the Turkish side in the negotiations is to achieve a level of market prices between the two sides, the SOCAR representative said.
The sides are going to reach compromise, fair and market-based solution. Any contract for long-term supply of gas, petroleum or petroleum products can work only in the case when needs of both buyer and seller are met, he said.
The issue of sale of gas as a part of the both Shah Deniz-I and Shah Deniz-II does not necessarily need to be addressed together, a SOCAR official said.
Azerbaijan plans to increase prices on gas exported to Turkey as a part of Shah Deniz I. 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 from April 15, 2008.
Gas price at $120 for 1,000 cubic meters is not realistic gas prices on world markets. Turkey sells gas at $380 per 1,000 cubic meters in domestic market.
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 development of off-shore Shah Deniz field 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%).
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