Azerbaijan, Georgia, Turkey up to divide gas again

Next week Georgia, Turkey and Azerbaijan are to start negotiating shares in the Shah Deniz field's gas which is sent through the Baku-Tbilisi-Erzurum pipeline.

Azerbaijan's national gas company Azerigaz started pumping gas to Georgian on Monday, the company's director general Alikhan Melikov told the Interfax news agency Tuesday.

Azerbaijan will deliver 90 million cu. meters of gas to the neighboring country before the end of March, Mr. Melikhov said.

Last December Georgia was reluctant to close a deal with Gazprom waiting for supplies from Iran and Azerbaijan's Shah Deniz gas field. Seeing no progress in the two directions, Tbilisi finally agreed to buy Russian gas at $235/1,000 cu. meters. Russian President Vladimir Putin commented on the gas talks with Georgia last week, saying he knew nothing about reasons for difficulties with Iran.

Meanwhile, the Azeri energy minister pledged Tuesday that gas extraction at Shah Deniz, disrupted last December, would resume within a week or two.

Talks between Azerbaijan, Georgian and Turkey on dividing the gas produced at the field may start this month. Georgia will push for an increase in its share from 300 million to 1.5 billion cu. meters of gas for the next two years, a source in the Georgian energy ministry told Kommersant.

However, supplies from Azerbaijan, additional shipments from Shah Deniz and the contract with Russia may leave Georgia with a surplus of gas. Should Tbilisi secure a larger share in the Shah Deniz field, Gazprom will probably have to cut prices for Georgia as early as this year. Kommersant