Azerbaijan, Russian gas company fully agree upon gas deliveries in 2006

Oil&Gas Materials 22 December 2005 15:13 (UTC +04:00)

Azerbaijan and Gasprom, a Russian oil giant, fully agreed and signed this week a contract on sale/purchase of gas in 2006. An official of Gasprom said that the sides accorded that in 2006 the prices of Central Asian gas to the country will make up $110 per cu m.

“We expect to deliver gas in the same amount in 2006,” the official said. In 2005 Azerbaijan plans to import some 4.5 billion cu m of fuel at $60 per 1000 cu m.

Domestic demand of Azerbaijan for gas is 9.5-10 billion cu m a year. Share of gas in the country�s fuel and energy balance is around 45%. Over the past few years gas production in Azerbaijan will comprise around 5.5bn cu m. 40% of the gas production in the country is covered at the expense of Bahar field. From 2006 Azerbaijan expects to increase gas production in connection with the commissioning of the Shah-Deniz field.

On 1 January 2004 Gasprom set up gas delivery to Azerbaijan. In December 2003 the Gasexport and the State Oil Company of Azerbaijan (SOCAR) signed a 5-year contract on sale/purchase of natural gas, which enacted into law on 1 January 2004 and is to last by 31 December 31 2008. The contract envisages delivery of 4.5 billion to Azerbaijan a year.

In 2006 Gasprom will export natural gas to the South Caucasus at unified price - $110 per cu m. In 2006 Gasprom will double amount of gas deliveries to Georgia - to 2.25 billion cu m against 1.3 billion cu m in 2005.