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Azerbaijan, Iran discuss technical gas purchase

5 September 2016 13:24 (UTC+04:00)
Azerbaijan, Iran discuss technical gas purchase

By Nigar Abbasova

Azerbaijan’s state energy giant SOCAR, is in talks with Iran on the purchase of technical gas to fill Azerbaijan’s underground gas storage facilities, President of SOCAR Rovnag Abdullayev told reporters on September 5.

“Iran faces certain problems with the provision of gas supplies in the winter season, therefore Iranian side is interested in the use of our storages,” Abdullayev said.

Abdullayev mentioned that the issue was high on agenda during the visit of Iran’s President Hassan Rouhani to Azerbaijan.

The gas purchase will enable us to increase the volume of its injection into reservoirs, as well as to test the capacity of our gas storage facilities, he said earlier, adding that currently, capacity of storages nears 3.5 billion cubic meters (bcm), but in theory, it is possible to increase it to more than 5 bcm.

Iran’s gas production in winter is less than the consumption in the country. But in summer Iran produces several billion cubic meters of surplus gas. The country stores some of the surplus gas in Shoorijeh and Sarajeh gas storage facilities.

Moreover, Azerbaijan also needs technical gas to check capacity of its storages.

Two underground gas storage facilities (Garadag and Kalmaz), which belong to SOCAR’s Azneft syndicate play a major role in ensuring a steady year-round supply of gas in Azerbaijan. Kalmaz storage is located 75 km southeast of Baku and was put into operation in 1955, while Garadag storage is located 25 km southeast of Baku and it was launched in 1954.

Abdullayev also mentioned that such negotiations [testing of capacity of storage facilities] were also held with the Russian Gazprom company, however SOCAR was not satisfied with conditions of the Russian side.

He added that SOCAR already sent its offers to Gazprom, but no talks are being held currently.

Director General of the Gazprom Transgaz Makhachkala OJSC Alexander Astanin earlier said that his company was holding talks regarding the supply of 3-5 bcm of gas per year to Azerbaijan.

Abdullayev earlier said that gas swap with Gazprom would enable Azerbaijan to ensure the gas supply to southern regions of Russia and to test its own gas storage facilities as well as, in case of a consistently high level of injection into them, to reduce the volume of extraction of associated gas at the Azeri -Chirag- Guneshli, and to pump it to the maximum extent to reservoirs to increase oil output at the block.

Gas production forecast for 2016 stands at the level of 5.6 bcm while the level forecast for 2017-2018 is 5.8 bcm.

TANAP

Commenting on the implementation of the Trans-Anatolian Natural Gas Pipeline (TANAP) project, which envisages transportation of gas of Azerbaijan’s Shah Deniz field from Georgian-Turkish border to the western borders of Turkey, Abdullayev said that that works are currently underway in accordance with the plan, adding that there are no problems with the implementation of the project.

“Partly, we are even ahead of schedule and 850 kilometers of pipes have been already welded,” Abdullayev said, adding that the project’s financing is not a problem and the Azerbaijani government is in talks to attract external resources.

Worth of the pipeline is currently estimated at $9.3 million.

The gas is expected to be delivered to Turkey in 2018, and after completion of the Trans Adriatic Pipeline’s (TAP) construction, the gas will be delivered to Europe in early 2020.TAP's initial capacity will be 10 billion cubic meters of gas per year with the possibility of expanding it to 20 billion cubic meters

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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