SOCAR: Azerbaijan and Turkey develop intergovernmental agreement on gas issues
Azerbaijan, Baku, May 10 / Trend E.Ismayilov /
The State Oil Company of the Azerbaijan Republic (SOCAR) and representatives of the Turkish national pipeline company Botas are working to prepare an intergovernmental agreement on gas issues in Baku, SOCAR head Rovnag Abdullayev said at the opening of a bust of late national leader Heydar Aliyev at the gas-processing plant today.
The sides are discussing the details of the principle agreement on gas prices in the first and second stages of the Shakh Deniz Field and the transit of Azerbaijani gas through Turkey, which was reached between Azerbaijan and Turkey earlier, Abdullayev said.
Azerbaijani gas is supplied to Turkey at $120 per 1,000 cubic meters. However, the cost of gas for consumers on Turkey's domestic market is over $300 per 1,000 cubic meters.
As stated in the contract with Turkey, gas transit prices from Shah Deniz can be reviewed after one year, which means a new price can be introduced April 15.
Turkey has repeatedly stated its readiness to pay the difference that arises in the case of an agreement between the parties on a new gas price in the first stage. Gas sales to Turkey under the second phase of Shah Deniz will be carried out already at the rate of the new price.
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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