Azerbaijani methanol company refuses to purchase Gazprom's gas

/By AzerNews/

By Aynur Karimova

Azerbaijan's AzMeCo methanol company has suspended the purchase of gas Russia’s Gazprom.

AzMeCo told Trend on October 20 that due to the fact that the world prices for methanol decreased, the purchase of gas from Gazprom at the current price has become unprofitable for the company.

“Accordingly, the company decided to suspend the purchase of gas, as methanol production is unprofitable under existing conditions,” the company reported.

Gazprom started gas supplies to Azerbaijan on September 29, in accordance with the purchase-sale contract, concluded in September 2015 for 5 years with the possibility of extension. The average daily volume of supplies was about 6 million cubic meters.

So far, AzMeCo received more than 100 million cubic meters of Russian gas. The abovementioned agreement envisages supplying up to 2 billion cubic meters of gas per year to Azerbaijan.

In July, SOCAR President Rovnag Abdullayev told journalists that SOCAR has allowed Gazprom Company to supply gas to Azerbaijan's AzMeCo methanol company.

"We do not have a need to import gas, as we fulfill all our contractual obligations. The fact is that a methanol plant was constructed, but no long-term contract for the supply of gas was concluded with SOCAR, so we do not have resources for it. For this reason, when Gazprom addressed us, SOCAR did not oppose to the purchase of gas by AzMeCo from the Russian company. A contract on the supply of Russian gas to the plant via our pipelines was concluded," Abdullayev said.

Currently, Gazprom has a contract (with the possibility of extension) on purchasing Azerbaijani gas signed October 14, 2009. The contract between SOCAR and Russia’s Gazprom allows for suspending and resuming gas supplies at any time.