Azerbaijan Republic Ministry of Industry and Energy: Azerbaijan has the right to increase gas price for Turkey

Azerbaijan’s Deputy Minister of Industry and Energy Gulmammad Javadov said Azerbaijan hopes for the rapid solution of all the terms of the agreement on Azerbaijani gas deliveries to Turkey.

“We hope we’ll reach the agreement. I cannot name the prices we are talking about since it’s a commercial secret. But I can say one thing, Azerbaijan has a full right to increase prices for gas exported to Turkey,” Javadov underlined.

The Turkish government has reported of growth of supplies of Azeri gas supplies from Shah Deniz field via Baku-Tbilisi-Erzurum pipeline.

Gas supplies via this pipeline in 2008 reached 3.8 bn cu m.

The agreement on Azeri gas export from Shah Deniz to Turkey was signed in Ankara on March 12, 2001. Under the gas sale & purchase agreement between SOCAR and Botas, the latter undertook to buy from Azerbaijan 89.2 bn cu.m. of gas for 15 years (2004-18). A new gas pipeline via route Baku-Tbilisi-Erzurum will be constructed for gas export. The gas price for Turkey is fixed at the level of $70-120 per 1 000 cu.m.

Gas export from Shah Deniz field to Turkey began on July 3, 2007. Gas is supplied via South Caucasus gas pipeline Baku-Tbilisi-Erzurum.

The contract for Shah Deniz field development was signed in Baku on Jun.4, 1996 and ratified by Milli Majlis on Oct.17 of the same year.

The Shah Deniz project partners are: BP (operator: 25.5%, Statoil (25.5%), SOCAR (10%), LUKoil (10%), NICO (10%), TotalFinaElf (10%), and TPAO (9%).

Shah Deniz reserves are estimated in 625 bn cu.m. of gas and 101 million tons of condensate. Currently gas production on Shah Deniz field is carried out within Phase 1 of the Project.

/Azerbaijan Business Center/