Azernews.Az

Azerbaijan's state oil company SOCAR that produces oil and gas from the country's vast energy fields is considering exports of gas to Iran.
The resource-rich South Caucasus republic which has succeeded in considerably beefing up gas output in recent years could launch the exports as early as this year. The neighboring country has sought to purchase 1.5-2 million cubic meters a day from Azerbaijan, president of the state-controlled gas supplier Azerigas Alikhan Malikov told a news conference Friday.
"Talks are being carried out by SOCAR on selling natural gas to Iran, while Azerigas will deal with its transportation," Malikov said, expressing confidence that the issue would find its solution soon.
Azeri gas is already supplied to the southern neighbor through the Gazi-Mahammad-Astara-Bind-Biand pipeline. However, the deliveries do not represent exports, as Iran in exchange supplies the same volume to the Nakhchivan Autonomous Republic, which has no direct transportation link with the rest of Azerbaijan.
"We are working to technically prepare the country's transportation system to arrange the exports of an additional volume of gas to Iran," the Azerigas president said.
Gas has been supplied to Nakhchivan via Iran since October 2005. In exchange for the bulk delivered a month ahead of time to Iran through the borderline town of Astara, the neighboring country supplies the same volume to the autonomous republic the following month. The supplies amount to some 350 million cubic meters of gas and could be raised to 500 million cubic meters.
Malikov said further that SOCAR planned to continue in 2008 gas supplies to Georgia that were suspended on January 6.
"The suspension was caused by the expiry of a relevant agreement. Talks are now under way between the sides to extend it… 2 million cubic meters of gas are to be supplied daily to Georgia," the Azerigas boss said.
Azerigas is acting as SOCAR's intermediary under the contract.
Georgia had been meeting its domestic demand on account of Azeri gas since January 2007. The neighboring South Caucasus republic was buying 2m cu. m. a day from Azerbaijan as an additional source of gas in the backdrop of a reduction in deliveries from Russia, which has raised the price. Since March 2007, Georgia has also been receiving gas produced from the biggest Azerbaijani offshore field Shahdaniz through the newly-built Baku-Tbilisi-Erzurum pipeline that goes through its territory as well as Azerbaijan and Turkey. As for SOCAR's gas, it is delivered through the Gazi-Mahammad-Gazakh conduit. Shahdaniz gas costs the country $63, while that of SOCAR - $120 per 1,000 cu. m.
Georgia is looking to reduce its dependence on overly expensive Russian supplies by importing Azeri gas. The country was previously expected to buy 1.1bn cu. m. from Russia's gas behemoth Gazprom last year for $235 per 1,000 cu. m., reports say.