Iran says willingness to purchase Azerbaijani gas from Shah Deniz

Iran has expressed a willingness to purchase gas within the second phase of development of the Azerbaijani offshore Shah Deniz field, the Iranian SHANA news agency quoted the National Gas Export Company Engineering Department Director Rasul Salmani as saying.

"We [:] want to purchase this gas and hope that we will reach Azerbaijan agreement," Salmani said.

The State Oil Company of the Azerbaijani Republic (SOCAR) President Rovnag Abdullayev said that Azerbaijan intended to sale its gas within the second phase of development of Shah Deniz field on beneficial price.

"We pays significance to every pipeline, review commercial terms [:], so that to sell our gas at beneficial price," SOCAR said.

SOCAR and partners on Shah Deniz project are holding marketing research in order to deal long-term contracts in 2009.

President of the StatoilHydro Azerbaijan company Kristian Hausken believes that partners on the project are needed to choose more attractive gas markets from the Phase-2 project to obtain best economic results. The StatoilHydro operates the Azerbaijan gas supply company, which is occupied with marketing of gas within the first phase of the Shah Deniz field.

"We are considering all directions for gas transportation and their
potential long-term profitability. Gas routes may follow the South Caucasian pipeline to west to Turkey, passing to north to Russia or to south to Iran," Hausken said.

The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants include: BP (25.5 percent); Statoil (25.5 percent); SOCAR (10 percent); LukAgip (10 percent); NICO (10 percent); Total (10 percent); and TPAO (9 percent).

Gas production at Shah Deniz began in December 2006. Gas is presently
transported to Georgia and Turkey via the South Caucasus Pipeline. The daily average gas production from the field is 22-24 million cubic metre.

The first development phase envisages producing an annual 9 billion cubic meters of gas. The production volume in the second phase scheduled for 2012 will increase to 20 billion cubic meters.

/Trend Capital/