Europe must offer Azerbaijan better conditions on gas purchase: expert

"As though Europe did not accept the gas deal of Azerbaijan with Russia, Baku has the right to sell its gas at its own discretion. And if Europe is so much in need of this gas, the only way is to offer Azerbaijan better conditions than Moscow," said the editor-in-chief of Kommersant newspaper Azer Mursalov.

"With regards to the form of the deal, it is not so principal whether this will be trade on the "swap" system, whether it will be provision of Dagestan or transit through Russia. The principal is the reliability and price. If Russia would buy gas from Azerbaijan at a favorable price, then for Azerbaijan it is not principal where the gas goes further," Mursalov told Trend Capital in a telephone conversation from Moscow on April 20.

"I think this will be addressed in the process of negotiations directly with Gazprom. "It is important that during the negotiations, Azerbaijan receives political guarantee of this deal. So, it is not so much about the deal between the companies, but the interstate agreement that is not so easy as the deal between the companies," said the editor-in-chief of the influential Russian newspaper.

With regard to the fate of Nabucco and other projects on gas supply to Europe beyond Russia, they have a diverse network of potential suppliers, not only Azerbaijan, but mainly Central Asia and Iran. Today the discussion goes on who will finance the construction of Nabucco. If Europe would assume it and offer favorable conditions, "I do not think that for political reasons, some countries will refuse to sell gas," said Mursalov.

The main point is that Turkey, through which these pipelines will pass, does not want to be only a transit country, but wants to be a manager," said Mursalov.

In March, Gazprom and Azerbaijan agreed to commence negotiations on the conditions of gas supply from Azerbaijan starting from January 2010. The proposal to buy Azerbaijani gas according to long-term contract was made in June 2008 during the meeting of head of Gazprom Alexey Miller with the President of Azerbaijan Ilham Aliyev in Baku.

In the near future, Gazprom and SOCAR will conduct a technical inspection of Baku-Novo-Filya gas pipeline for its modernization. Via this pipeline, Azerbaijani gas will be supplied to Russia. Baku-Novo-Filya is a gas transportation system of Azerbaijan, which runs from Baku to the Russian border on the Caspian coast. The length of the pipeline is about 200 km, the diameter of the pipe - 1220 millimeters.

Azerbaijan has natural gas reserves of nearly two trillion cubic meters. Natural gas consumption in Azerbaijan equals 12-14 billion cubic meters per year.

/Trend Capital/