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Azerbaijan and Russia launch official negotiations on gas deal

30 March 2009 14:49 (UTC +04:00)

Baku. Vugar Israfilov â€“ APA-Economics. The State Oil Company of Azerbaijan (SOCAR) has announced that the last weekâ€™s agreement between Gazpromâ€™s Alexei Miller and SOCARâ€™s Rovnag Abdullayev is not a gas deal but a framework to officially launch negotiations on the future gas sales.

SOCAR slammed Russian media reports about the memorandum of understanding signed in Moscow on Friday.

SOCAR told APA-Economics that the parties have only agreed to explore the efficiency and possibility of gas sale and exchange and there is no agreement for Russiaâ€™s buying gas from Azerbaijan.

Under the memorandum, Gazprom and SOCAR will jointly inspect a 200-kilometer pipeline from Baku, the Azeri capital, to the border point of Novo-Filya, in Dagestan, to determine the extent of upgrades. This pipeline is likely to take gas from Azerbaijan to Russia if the parties agree.

Rovnag Abdullayev told reporters that natural gas amounts which could be sold to Russia may mainly come from associated gas from SOCARâ€™s oil and gas extraction units and Azeri-Chirag-Guneshli (Deepwater) not from Shah Deniz.

He added that Gazprom expressed interest during the meeting in Moscow to supply gas to Iran, and Azerbaijan showed interest to make use of Gazpromâ€™s infrastructure as transit lines.

â€œThe memorandum is main aim is to sell its gas for a higher price and the meeting in Moscow is a part of these negotiations with gas companies and countries,â€ he said, adding that the sale of Shah Deniz Phase II gas is not the subject of these negotiations.
SOCAR is estimated to have at least 1.5 billion cubic meters of natural gas for sale in 2010-2011 owing to Bahar, Guneshli and Umid fields.

According to unconfirmed information, the second phase of giant Shah-Deniz gas field is expected to begin operations by 2014, rather than the officially held 2012 start-up date.