Baku, Ankara bring end to lengthy gas dispute
Baku and Ankara have agreed in principle on
transporting Azerbaijani gas to Turkey and further to Europe,
Turkish Minister of Energy and Natural Resources Taner Yildiz was
quoted by CNN Turk TV channel as saying.
According to him, both countries have taken concessional steps to reach agreement.
Yildiz said three issues were on the negotiating table: the price of gas exported to Turkey during Phase 1 of developing Azerbaijan’s biggest gas field Shahdaniz, the price and volume of gas to be sold to Turkey during Phase 2, as well as the transit of fuel to Europe.
"There is understanding in principle on all these issues, but details are not disclosed for the time being as topics for discussion remain," Yildiz said.
Under the agreement signed, the price of Azerbaijani gas sold to Turkey is $120 per 1,000 cubic meters -- considerably lower than those in world markets. Supplies to the neighboring country began in 2007. According to the gas supply contract concluded by Shahdaniz partners with Turkey, the price of Azerbaijani gas is to be reconsidered a year after the start of gas deliveries, i.e. the new price should have gone into effect on April 15, 2008.
Also, Baku sought to transport its gas produced during Phase 2 to Europe through Turkey and sell it for market-level prices, while Ankara offered to buy Azerbaijani gas and then sell it to European consumers on its own. This had caused a long-standing dispute between the two countries and diminished prospects for the Nabucco pipeline project, which aims to pump gas from the Caspian and Central Asia regions to energy-thirsty European markets.
The Turkish minister also said paying a compensation for Azerbaijani gas supplied since the contract on the deliveries expired in 2008 had been planned beforehand, and Baku agreed with this.
Yildiz said no unresolved issues remain between Turkey and Azerbaijan regarding the Nabucco project, either.
"We have two objectives on Nabucco, with one being acting as partners and the other being part of resolving the energy security issue for the European Union. We are saying that ‘Azerbaijani brethren can transport this gas through Turkey and supply it for Nabucco’. Likewise, they can do it on other projects as well. We have fulfilled our tasks. After that, whether or not gas will go to Nabucco depends on the consortium which both we and the Azerbaijani side are part of."
Yildiz said agreement on gas supplies with Azerbaijan was reached after Turkish Prime Minister Recep Tayyip Erdogan became involved. He noted that he and the president of the Azerbaijani state energy firm SOCAR, Rovnag Abdullayev, had met with Erdogan and sought his "judgment" on the gas dispute.
"Our prime minister said: ‘Relations with our Azerbaijani brethren are above all agreements of strategic and political importance…’ If one may say so, the prime minister found a common ground," Yildiz said.
The Nabucco project worth 7.9 billion euros envisions building a pipeline to supply gas to Europe. Construction work is expected to begin in 2011 and first supplies are scheduled for 2014. The pipeline’s maximum capacity will be 31 billion cubic meters per year. The Nabucco consortium includes the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE, each holding 16.67 percent of the stock.*
According to him, both countries have taken concessional steps to reach agreement.
Yildiz said three issues were on the negotiating table: the price of gas exported to Turkey during Phase 1 of developing Azerbaijan’s biggest gas field Shahdaniz, the price and volume of gas to be sold to Turkey during Phase 2, as well as the transit of fuel to Europe.
"There is understanding in principle on all these issues, but details are not disclosed for the time being as topics for discussion remain," Yildiz said.
Under the agreement signed, the price of Azerbaijani gas sold to Turkey is $120 per 1,000 cubic meters -- considerably lower than those in world markets. Supplies to the neighboring country began in 2007. According to the gas supply contract concluded by Shahdaniz partners with Turkey, the price of Azerbaijani gas is to be reconsidered a year after the start of gas deliveries, i.e. the new price should have gone into effect on April 15, 2008.
Also, Baku sought to transport its gas produced during Phase 2 to Europe through Turkey and sell it for market-level prices, while Ankara offered to buy Azerbaijani gas and then sell it to European consumers on its own. This had caused a long-standing dispute between the two countries and diminished prospects for the Nabucco pipeline project, which aims to pump gas from the Caspian and Central Asia regions to energy-thirsty European markets.
The Turkish minister also said paying a compensation for Azerbaijani gas supplied since the contract on the deliveries expired in 2008 had been planned beforehand, and Baku agreed with this.
Yildiz said no unresolved issues remain between Turkey and Azerbaijan regarding the Nabucco project, either.
"We have two objectives on Nabucco, with one being acting as partners and the other being part of resolving the energy security issue for the European Union. We are saying that ‘Azerbaijani brethren can transport this gas through Turkey and supply it for Nabucco’. Likewise, they can do it on other projects as well. We have fulfilled our tasks. After that, whether or not gas will go to Nabucco depends on the consortium which both we and the Azerbaijani side are part of."
Yildiz said agreement on gas supplies with Azerbaijan was reached after Turkish Prime Minister Recep Tayyip Erdogan became involved. He noted that he and the president of the Azerbaijani state energy firm SOCAR, Rovnag Abdullayev, had met with Erdogan and sought his "judgment" on the gas dispute.
"Our prime minister said: ‘Relations with our Azerbaijani brethren are above all agreements of strategic and political importance…’ If one may say so, the prime minister found a common ground," Yildiz said.
The Nabucco project worth 7.9 billion euros envisions building a pipeline to supply gas to Europe. Construction work is expected to begin in 2011 and first supplies are scheduled for 2014. The pipeline’s maximum capacity will be 31 billion cubic meters per year. The Nabucco consortium includes the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE, each holding 16.67 percent of the stock.*
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