TODAY.AZ / Business

President Aliyev: "Azerbaijan may stop importing gas from Russia"

23 December 2006 [14:48] - TODAY.AZ
Azerbaijan's president said Saturday the country may stop importing natural gas from Russia.

In an interview with the Russian radio station Ekho Moskvy, Ilham Aliyev said Azerbaijan "may reshape its energy balance by switching over from [a combination of] fuel oil and gas to fuel oil."

Aliyev's comments came amid stalled talks over Russia's new gas price for its South Caucasus neighbor.

Azerbaijan and other post-Soviet countries have until now been buying natural gas from Russia at preferential prices, but Russian gas monopoly Gazprom is set to raise the rates to the Western European level as of 2007.

The state-controlled energy giant said it could supply 1.5 billion cubic meters of natural gas to Azerbaijan next year - half the amount requested - charging $230 per 1,000 cubic meters. The current price is $110.

Azerbaijani officials dismissed the new price as unfair, and have been trying to negotiate a compromise deal with Gazprom.

Azerbaijan is rich in oil, but the Caspian nation's domestic gas production, totaling an estimated 4-5 billion cubic meters per year, covers less than a half of its needs.

Aliyev said Russia has raised the gas price for Azerbaijan to cash in on his country's shortages. He described the move as "unsavory" and contradicting "the spirit and the essence of Azerbaijani-Russian relations," but said the issue should not be politicized.

Azerbaijan uses natural gas to produce electricity, and its refusal to source gas from Russia will necessitate cuts on the amount of Caspian oil pumped to the Russian port of Novorossiisk.

"We have no alternative [to the cuts] as our electric power plants need fuel to keep going," Aliyev said. RIA Novosti

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