Turkey to buy Azerbaijani gas at new price
Azerbaijan, Baku, Oct. 28 / Trend /
Turkey will pay at a time all the difference in the cost of the Azerbaijani gas, and in the future the country will purchase fuel at a new price, the Turkish Minister of Energy and Natural Resources, Taner Yildiz said.
The amount to be paid to Azerbaijan will depend on the agreement on a gas price. According to the Turkish media, it can vary between $500 million and $1.1 billion. The Minister refers to the amount of $500million-$600 million.
Next week Baku will host another round of negotiations, Yildiz said. The price of the Azerbaijani gas supplied to Turkey from the Shah Deniz field is discussed in a package with the sale and transit of the Azerbaijani gas via Turkey to Europe.
According to the Minister, Azerbaijan declares that transit tariffs for gas, proposed by Turkey, are high. However, he said Russia offers $2.6 per 100 kilometers for the transportation of 1,000 cubic meters of gas and $2.36 is offered to Azerbaijan.
In the near future SOCAR (State Oil Company of Azerbaijan) plans to sign a commercial agreement with Turkey on the price of Azerbaijani gas within development of the Azerbaijani Shah Deniz field.
Today Azerbaijani gas is supplied to Turkey at a price of $120 per 1,000 cubic meters. However, the cost of gas for consumers on the domestic market of Turkey is around $380 per 1,000 cubic meters.
As stated in the contract with Turkey, the price of gas from Shah Deniz field can be reviewed after one year of supply, i.e., the new price will be introduced from 15 April 2008.
Under the contract, Turkey must receive 6.6 billion cubic meters of gas from the Shah Deniz field within the first stage of this project. The project partners will ensure this volume of supply later this year.
The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.
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