Russian President Dmitry Medvedev visited Baku Thursday for talks with his Azerbaijani counterpart Ilham Aliyev expected to focus on energy cooperation between the two oil-rich countries.
"For Russia, Azerbaijan will be a strategic partner in the South Caucasus and in the Caspian region for years to come," a Kremlin source, requesting anonymity, said before the visit.
"The question of increasing the efficiency of economic cooperation will play a leading role during the negotiations," the source said.
Trade between the two ex-Soviet countries hit $1.7 billion in 2007, a 5% increase from 2006, according to figures provided by the Kremlin.
The two presidents are expected to sign a strategic partnership declaration during the visit, the Kremlin source said.
Azerbaijan, a U.S.-friendly Muslim state wedged between Russia and Iran, is a key partner in a Western-backed corridor of oil and gas pipelines built in recent years to deliver Caspian energy resources to the West.
Russia and the West are vying for long-term energy contracts with Azerbaijan, which announced in June that it plans to nearly double gas production by 2015.
Russian gas giant Gazprom said in June that it had made an offer to Azerbaijan for long-term supply contracts at "market prices."