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Turkey presents to Azerbaijan changed gas tariffs in framework of first and second phases of Shah Deniz: Foreign Ministry official

Oil&Gas Materials 10 June 2009 15:55 (UTC +04:00)

Azerbaijan, Baku, June 10 / Trend , E.Ismayilov/

Turkey presented to Azerbaijan tariffs for purchase of gas in the first and second phases of the Azerbaijani offshore gas field Shah Deniz. The changed tariffs correspond to the current world prices for gas, Foreign Ministry General for Energy, Water and Environment Department Deputy Director Vural Altay said in Baku on Wednesday.

Altai did not name the price proposed by Turkey for Azerbaijani gas. "It is a commercial matter," he added.

"At the last meeting with the representatives of SOCAR Turkey [Botas] presented a package of proposals, which includes the price of gas in the first and second phases of development of Shah Deniz, as well as the transit of Azerbaijani gas through Turkey. SOCAR is expected to respond on the matter," Altay said.

Negotiations are holding between the SOCAR and Turkish state pipeline company Botas, and Turkey looks forward to signing a document on the matter this year.

"I believe that we'll reach a common agreement with Azerbaijani," Altay said.

He said talks between Azerbaijan and Turkey on gas has been held for a long time, but there is good progress in these negotiations in recent years.

"This is a good proposal and I hope our Azerbaijani brothers will take it" Altay added.

Signing of a transit agreement between Turkey and Azerbaijan is necessary to transport Azerbaijani gas directly to Europe.

Azerbaijan intends to increase the price of gas to Turkey in the first phase of development of the Shah Deniz. Azerbaijan sales gas to Turkey at a price of $120 per 1,000 cubic meters. However, the price specified in the contract dated to 2001.

Under the contract with Turkey, the cost of gas from Shah Deniz could be reviewed one year after the start of supply, i.e. the new price would apply from April 15, 2008.

Under the contract, Turkey is to receive 6.6 billion cubic meters of gas from the field of Shah Deniz in the first phase of development of the project.

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 percent), Statoil (25.5 percent), SOCAR (10 percent), LukAgip (10 percent), NICO (10 percent), Total (10 percent), TPAO (9 percent) and SOCAR - 10 percent. Field's reserves are estimated at 1.2 trillion cubic metres.

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