Turkey-Azeri Pipe Deal Pushed Back

Turkey-Azeri Pipe Deal Pushed Back
Upstream Online
Τετ, 2 Ιουνίου 2010 - 14:47
Specific commercial and investment aspects of a deal, which will lay the terms for export of the Caspian gas through pipelines leading to Europe, will be decided in 6 months to 8 months, said Murad Heydarov, adviser to Azeri President Ilham Alyiev.

Specific commercial and investment aspects of a deal, which will lay the terms for export of the Caspian gas through pipelines leading to Europe, will be decided in 6 months to 8 months, said Murad Heydarov, adviser to Azeri President Ilham Alyiev.

The next round of negotiations between the two sides begins tomorrow, leading up to Aliyev's visit to Turkey, when the two countries are expected to sign a general agreement on broad terms on 7 June.

Azerbaijan will also look for buyers for new gas volumes for next year.

Russia has already said it is looking to buy up second phase Shah Deniz gas from Azerbaijan, which also exports gas to Turkey, Georgia and Iran over four pipelines.

Azerbaijan will have an additional 1.4 billion cubic metres of gas in 2011 that it can export from its off-shore Shah Deniz gas field, said state oil company Socar's general manager of gas export.

The additional gas, due to increased efficiency at field wells, will boost output above a peak level of 8.6 Bcm this year.

"Production should reach 10 Bcm next year, which should free up additional gas exports to Europe," Reuters quoted export manager Kamal Abbasov as saying on the sidelines of the 17th Caspian Oil and Gas Conference.

Turkey and Azerbaijan have been negotiating for two years a broad gas deal that is expected to lay the foundation for gas exports to Europe through the EU-backed Nabucco pipeline project, part of a "southern corridor" of energy supplies leading to Europe.

Lack of an agreement between the two sides has delayed the second phase of the Shah Deniz gas field, co-led by BP and Statoil and led to frustrations among those supporting the southern corridor.

Nabucco has yet to secure any supplies for the 31 Bcm pipeline, seen coming on line at the end of 2014, leaving it vulnerable to Russia's South Stream pipeline.

"The concept of a Southern Corridor is simply not viable if countries that stand to most to benefit from it cannot reach commercially sensible, mutually advantageous on the terms under which gas for the corridor will be transported," said US envoy for Eurasian energy, Richard Morningstar.

The rival pipeline projects aim to meet consumption demand in Europe once a current gas supply glut is seen ending around 2015.

Azerbaijan's off-shore Shah Deniz field holds its largest gas reserves, expected to be at least 1.2 Tcm, though some analysts have put the reserves as high as 2 Tcm.

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