TODAY.AZ / Business

Turkey to bargain with Iran and Russia on natural gas

25 August 2006 [19:28] - TODAY.AZ
After the official opening of the Baku-Thiblisi-Ceyhan (BTC) pipeline last month, the energy focus has shifted to the Sahdeniz Project.

Turkey will be able to access $120 Azeri Gas beginning from September 30 in the frame of the Sahdeniz Project if no major difficulties occur before then. The project will be Turkey's second prestigious project after the BTC pipeline. Turkish Energy Ministry will have a stronger hand against Russia and Iran as this project gives them the opportunity to purchase cheaper Azeri gas. The price of Russian gas was $243 and Iranian gas was $263 at the end of 2005. Natural gas prices had increased in recent months parallel to oil prices. Sources close to the ministry noted there are some negative developments in the Sahdeniz project due to the attitude of British Petroleum (BP). It is claimed that the British company plans to cancel the contract in order to sell the $120 gas to other countries at a higher price.

A top level Botas authority admitted there has been a gas problem between Georgia and Russia and added that Georgia wants to reduce the amount of gas it buys to two billion cubic meters down from 6.6 billion cubic meters. The authority said Russia wants to change Azerbaijan's policy and increase the price of natural gas so it plans to reduce the amount of gas that Azerbaijan will sell to Turkey. The authorities accuse BP of provoking the situation and added: "Azerbaijan and other partners want to increase the gas price. They make statements on different platforms for this reason; however, our contract is strong enough to deal with this." It is reported that Georgia established connections with Turkey to buy gas however the authorities of Energy Ministry rejected this considering Turkey's need for gas.

BP authorities said they do not want to lose Turkey as a market and added they are not planning to sell Azeri gas to Georgia or any other countries. The very same authorities claim that Azerbaijan, which also buys gas from Russia, might be considering reducing the amount of gas it promised to sell Turkey. Gunsayil Company, which oversees the Turkey leg of the project, defended there is no delay in the project as claimed and the 225 kilometer pipeline will be completed by late September.

BP has the largest share among the partners in the Sahdeniz project. The distribution of shares in the project among the companies is as follows: BP 25 percent; Statiol 25 percent; Sca, Total, Nico and Lucoil companies 10 percent each and TPAO 9 percent. The Azeri gas will be taken from Georgia-Turkey border and will be connected to the pipeline coming from Iran via the 225 km long Sahdeniz Natural Gas Pipeline Project. After that the Azeri gas will reach to Ankara, 1,200 kilometers away. Greece is expected to receive 750 million cubic meters of the total 6.6 billion cubic meters to be purchased.

Turkey focused on the natural gas issues after Russia had problems with Turkmenistan and Ukraine and following a jump in oil prices. Turkey meets the majority of its need for gas from Russia and Iran and took action to increase the variety of its natural gas suppliers. The aim of Turkey here is to provide supply security and reduce the price of the gas purchased from Russia and Iran. Turkey plans to buy 6.6 billion cubic meters of natural gas annually for 15 years as part of the Sahdeniz Project. The $150-160 priced Egyptian natural gas, with 10 billion cubic meters capacity, will be available for Turkey in Early 2008.

/www.zaman.com/

URL: http://www.today.az/news/business/29389.html

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