Industry and Energy

Industry and Energy

Azerbaijan agrees to quadruple gas export to Russia

21 January 2010 14:15 (UTC +04:00)

The agreement to quadruple gas import from Azerbaijan was achieved between Rovnag Abdullayev, president of State Oil Company of Azerbaijan (SOCAR), and Alexei Miller, Chief Executive of Gazprom, in Moscow on January 21.

â€œUnder a new agreement reached at Gazpromâ€™s headquarters, Gazprom will buy 1 bcm of gas from Azerbaijan, compared to the originally agreed 500 million cubic meters. This amount will reach 2 bcm in 2011,â€ said Gazpom in a statement.

Initially, Gazprom struck a deal on October 14, 2009 to buy at least 500 million cubic metres from Azerbaijan this year with gas export launched from January 1, 2010.

This gas is likely to come from the first phase of the Shah Deniz project in the Caspian Sea. When the second phase becomes operational in several years, Azerbaijan will have about 20 bcm a year to offer.

A day earlier, Alexei Miller said that the existing agreement put no caps on gas purchases from Azerbaijan and reiterated Gazpromâ€™s willingness to take as much gas as Azerbaijan could offer.

Europe is also counting on gas from Azerbaijan to fill its proposed Nabucco pipeline, a rival to the Moscow-backed South Stream link, but the delay in Nabucco project allowed Russia to secure Azeri gas.

Backed by several EU countries and the United States, Nabucco aims to pipe gas from Turkey to Austria, diversifying current natural gas suppliers and delivery routes for Europe and lessening European dependence on Russian energy.