SOCAR head: Azerbaijan,Turkey to discuss gas issues at experts level

Oil&Gas Materials 30 March 2010 16:58 (UTC +04:00)

Azerbaijan, Baku, March 30 / Trend , E. Ismayilov /

Azerbaijan and Turkey continue talks on the cost of gas from Shah Deniz field and its transit through the territory of Turkey at the level of experts, SOCAR (State Oil Company of Azerbaijan) President Rovnag Abdullayev said.

"The talks envisage consideration of more than 100 issues, most of which are technical. These issues are also discussed at the experts level," he said.

According to Abdullayev, experts will complete their work in the near future and the talks will be continued at the level of the companies and ministries of the two country.

Azerbaijani gas is supplied to Turkey at $120 per 1,000 cubic meters.

As stated in the contract with Turkey, the gas transit price from Shah Deniz can be reviewed after one year, which means a new price can be introduced April 15, 2008.

As the representatives of SOCAR, which is a participant of the negotiations on the gas, the gas issue between Azerbaijan and Turkey is discussed in the package. These include issues of gas prices within the first stage of Shah Deniz field, the cost of gas for Turkey from the second stage of the project (start of the production after 2016) and agreement on the transit of Azerbajani gas through Turkey to Europe.  

At present, topic of discussion between the sides is the price of gas in the second phase of Shah Deniz field and the transit of Azerbaijani gas through Turkey.

The agreement between Azerbaijan and Turkey on the transit will allow Azerbaijani side to export its gas to Europe.

The most promising route for Azerbaijani gas supplies to Europe is the Southern Energy Corridor, which includes the Nabucco project, ITGI and Trans Adriatic Pipeline. However, the unsolved issue of transit of Azerbajani gas through Turkey pushes Azerbaijan to seek alternative routes.

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. Shah Deniz reserves are estimated at 1.2 trillion cubic meters.

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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