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Expert: SOCAR to become active player in Turkish domestic energy market

Oil&Gas Materials 13 October 2010 14:48 (UTC +04:00)

Azerbaijan, Baku, Oct. 13 / Trend R.Rahimov /

The Sate Oil Company of the Azerbaijan Republic (SOCAR) is becoming an active player in the Turkish domestic energy market, along with companies such as Russia's Gazprom , Head of the Turkish Center for International Relations and Strategic Analysis TURKSAM Sinan Ogan told Trend.

In the near future, SOCAR and Turkish state pipeline company Botas will sign a contract that provides for the gas transfer by the Turkish company to SOCAR's subsidiary in Turkey and its subsequent implementation in the domestic market of Turkey.

"Most likely, this means that SOCAR, as Gazprom, is preparing to play an independent energetic role in gas supplies for Turkey's domestic consumption," Ogan said.

According to him, it would lead to liberalization of the Turkish market and an agreement with SOCAR is a vivid example. "This is a very important event for the liberalization of the Turkish market," Ogan said.

It is an important moment in the Turkish market for gas supplying countries at this stage. In addition, one should not forget that SOCAR owns a large petrochemical complex in Turkey Petkim, which needs the gas, Ogan said.

The main amount of gas is envisaged for the Petkim petrochemical complex in Turkey. If excess gas is available, it will be sold on the domestic market of Turkey, the SOCAR representative said.

According to a memorandum of understanding signed between the Azerbaijani Industry and Energy Ministry and Energy and Mineral Resources Ministry of Turkey, SOCAR's affiliates will annually receive from Botas 1.2 billion cubic meters of gas from 6.6 billion cubic meters contracted for Turkey in the first stage of development of the Azerbaijani gas condensate Shah Deniz field. Gas will be transported by Botas for SOCAR until late 2016.

The cost of gas to the amount of 1.2 billion cubic meters will be made up of the cost of imported gas, cost of transportation inside the country and other tax duties.

Commercial terms of delivery of these amounts will be agreed between SOCAR and Botas under a "take or pay" contract.

Also, according to the memorandum, Botas will supply two billion cubic meters of gas to SOCAR for export to Syria and/or Bulgaria or Greece on terms to be agreed.

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