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Turkish official: No Turkey-Georgia gas deal yet

26 December 2006 [00:46] - TODAY.AZ
Turkey has not yet reached a deal with Georgia to supply the ex-Soviet republic with much-needed gas next year but expects talks to be concluded in one week, a senior Turkish Energy Ministry official told Reuters on Monday.

Georgia's Energy Minister Nika Gilauri said on Sunday his country had reached an agreement to buy 800 million cubic meters of gas from Turkey for its 2007 gas needs. The gas was due to come from the Shakh Deniz gas field, operated by BP and Norway's Statoil, in Azerbaijan.

Georgia, which buys most of its gas from Russian gas monopoly Gazprom, has been searching for alternative supplies after bitter rows with Moscow this year over issues including spying.

The Turkish official, who declined to be named, said Turkish state-run pipeline company Botas and Azerbaijan's SOCAR first needed to agree on selling gas to Georgia before Ankara could seal a deal with Tbilisi.

"First an agreement should be signed between the states of Azerbaijan and Turkey," the Turkish official said.

"Turkey will meet Georgian and Azeri officials this week in Istanbul to make a final decision on the issue," he added.

Turkey is scheduled to buy 6.3 billion cubic meters (bcm) per year once Shakh Deniz is fully operating. Turkey had originally planned to buy 3 bcm from the project in 2007.

Turkey will receive its first natural gas from the Caspian Sea field Shakh Deniz in July rather than in January as was originally planned, the official said.

Test flows of gas from Shakh Deniz began last week.

Azerbaijan had told Ankara that it could start pumping gas to Turkey from Shakh Deniz in March at the earliest due to a technical breakdown in natural gas wells, the official added.

After threatening to cut off supplies to Georgia, Gazprom said on Friday it would sell 1.1 bcm of gas to the ex-Soviet state and double prices to $235 per 1,000 cubic meters. Georgia needs about 1.9 bcm next year.

Georgia's President Mikhail Saakashvili visited Turkey last week to try to persuade Ankara to allow Georgia to bite into Turkey's quota of gas from Azerbaijan.

Turkey, which receives most of its gas from Russia, has been hesitant about providing Georgia with energy and has not yet made any public statement on the matter.

The EU-applicant country hopes to become a regional energy hub and has several major pipeline projects under way, including one to supply Russian gas to Israel. Reuters

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