Azernews.Az

The energy companies of Azerbaijan and Iran signed a memo in Baku on Wednesday on supplying the South Caucasus republic’s gas to its southern neighbor from 2010. The price of gas is not specified.
The memorandum of understanding was inked by Azerbaijan’s state energy firm SOCAR and the National Iranian Gas Company (NIGC). An agreement on the deliveries is expected by the end of 2009.
SOCAR President Rovnag Abdullayev said at least 500 million cubic meters of gas will be delivered to Iran annually in the initial stage.
"In the past, 10 billion cubic meters of gas was imported to Azerbaijan from Iran through existing pipelines. After the infrastructure is put in order, the volume of gas transported to Iran will be increased," Abdullayev said.
He said the price of exported fuel will be close to world levels and determined based on a special formula.
The two countries are linked with the 1,474 kilometer Gazi-Muhammad-Astara (Azerbaijan)-Bind-Biand (Iran) pipeline that has annual capacity of 10 billion cubic meters. The Azerbaijan section of the conduit is 296 km long. The route is a section of the Gazakh-Astara-Iran pipeline, which was commissioned in 1971.
So far, Azerbaijan has signed agreements on selling its natural gas with Georgia, Turkey and Russia.
In mid-October, SOCAR and Russian gas monopoly Gazprom signed an agreement on the sales of Azerbaijani gas to the neighboring country. Azerbaijan will tackle gas exports in January 2010. At least 500 million cubic meters will be exported to the northern neighbor next year.
Also, SOCAR is in talks with another consumer, Turkey, on exporting Azerbaijani gas for a new price. To date, the country has been paying $120 per 1,000 cubic meters.
Georgia had imported gas for the same price until January 2008. According to unofficial sources, the neighboring South Caucasus republic currently pays $180.
Azerbaijan produces most of its gas from the giant Shahdaniz field in the Caspian Sea, which holds estimated reserves of 1.2 trillion cubic meters.*