Azerbaijan and Turkey continue gas talks

Oil&Gas Materials 5 November 2009 12:52 (UTC +04:00)

Azerbaijan, Baku, Nov. 5 / Trend E.Ismayilov /

Negotiations are continuing between the State Oil Company of the Azerbaijan Republic (SOCAR) and Turkey on prices for Azerbaijani gas and transporting the gas via Turkey, head of the SOCAR Turkey Office Seymur Agayev said today.

"This issue requires time. But the sides will reach a decision," Agayev said.

According to Agayev, the parties will agree on the prices for gas and gas transit, "but no one wants to declare anything before a final decision is reached," he added.

Earlier SOCAR Director Rovnag Abdullayev said most issues and technological indicators concerning prices for Azerbaijani gas for Turkey have been resolved. The Azerbaijani and Turkish sides are coming close to finding a common position on this issue.

Azerbaijani gas is supplied to Turkey at $120 per 1,000 cubic meters. However, the cost of gas for consumers on Turkey'sc domestic market is around $380 per 1,000 cubic meters.

As stated in the contract with Turkey, the price on gas from Shah Deniz can be reviewed after one year, which means a new price can be introduced April 15.

Under the current contract, Turkey must receive 6.6 billion cubic meters of gas from Shah Deniz in the first stage of the field's development.

A contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants to the agreement are: BP - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent and SOCAR - 10 percent.

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