Azernews.Az

Azerbaijani President Ilham Aliyev says Turkey pays too little for natural gas and Baku will seek other routes to deliver its gas to Europe.
Aliyev said, during a televised cabinet meeting in Baku on Friday, that Turkey is paying Azerbaijan only one-third of world-market prices and low transit fees, RFE/RL`s Azerbaijani Service reports.
He said such a practice is ``illogical`` and ``no country in the world would accept these terms.``
Aliyev said the unresolved gas transit issues with Turkey stand in the way of transporting Azerbaijani gas at full capacity to European markets.
His comments follow sharp criticism from Baku over improved relations between its ally Turkey and Armenia, with whom it is in conflict over the Upper (Nagorno) Garabagh region.
Aliyev also alluded to the Western-backed Nabucco pipeline project to bring natural gas from the Caspian Sea to Austria via Turkey, saying: ``unresolved transit fees and unacceptable demands in reality can result in the disruption of a project of world importance.``
He said that ``for the last two years we have been trying to resolve this issue in a business-like and friendly manner, but our patience is exhausted.``
Aliyev said the current offer from Turkey made during negotiations in April would never be accepted by Azerbaijan.
``We are being offered a fee that is 70 percent higher than the transit tariffs in the region. Who would agree with this?`` Aliyev asked.
The president said Azerbaijan is currently seeking additional markets to sell its gas. He recalled that Azerbaijan has signed a contract with Russian giant Gazprom and will begin selling gas to Russia early next year. ``That agreement does not specify the maximum volume of gas we will have to supply. In other words, Azerbaijan can sell as much gas as it wants to Russia. And, since there is no transit country [between Russia and Azerbaijan], for prices complying with world market levels.``
While Aliyev mentioned Russia as one possible route for Azerbaijani gas, he said another option is selling gas to southern neighbor Iran, which buys gas from Turkmenistan.
The president listed two other options for exporting gas to the European Union ``through Georgia and Black Sea ports,`` saying that Baku has had extensive talks with Romania and ``can work with Bulgaria.``
Aliyev added that Azerbaijan is ready to begin the second phase of the project on tapping its largest gas field, Shahdaniz, which will bring an additional $20 billion in investment. But he said the country has been unable to launch the project because of unresolved transit issues with Turkey. Despite the deal with Gazprom, Aliyev repeated that Baku signed an agreement with the EU on energy cooperation in 2006 that it intends to fulfill.
Turkey was quick to respond to the statement. Energy Minister Taner Yildiz said Turkey is ready to pay more for transit of Azerbaijani gas across its territory, Reuters reported.
``We are ready for talks. We have made our offer. This offer is also favorable to Azerbaijan. We always said we will pay more. Azerbaijan have viewed this positively at this initial stage,`` Yildiz said.

Economic growth
During the cabinet meeting, the Azerbaijani leader also said the first nine months of 2009 were successful for the nation`s economy. Amid a financial crisis worldwide and an economic downturn in most countries, positive trends continued in Azerbaijan.
``The Gross Domestic Product (GDP) grew 6.1% and industrial production - 5% over nine months of this year. A 3% growth was also reported in the agriculture sector. Moreover, a record 3 million tons of grain were produced in Azerbaijan this year.``
Aliyev noted that the macroeconomic situation in the country was stable, and inflation constituted 2.1% from January through September. This indicates that the impact of the world financial crisis on the living standards of Azerbaijani citizens was minimal, and the manat [the national currency] maintained its stability. The earnings of the population increased by approximately 10% and average monthly wages - 15%. Azerbaijan`s currency reserves presently amount to $19 billion.
``We are guided by our domestic resources in pursuing an economic policy. In this case, the Azerbaijani economy can come out of any situation,`` the president said.
Further, Aliyev said Azerbaijan`s oil revenues are being directed to the development of the country`s non-oil sector. As a result of the government`s efforts, the poverty level has been reduced in the country. Also, 824,000 jobs have been created in Azerbaijan since 2003.
According to the head of state, the 2010 state budget has been drafted in a balanced manner, and the price of oil has been set at $45 a barrel.
Aliyev voiced confidence that the country`s strong economic performance would continue next year.