Azernews.Az

The long-awaited deal on supplying Azerbaijani gas to Turkey will be signed during Azerbaijani President Ilham Aliyev’s visit to Turkey, due June 7-8, paving the way for gas exports to Europe. The agreement was previously expected to be signed on Monday, but Turkish Prime Minister Recep Tayyip Erdogan said following talks in Baku that it would be signed during President Aliyev’s visit, though he made clear that no outstanding differences remain.
Erdogan told reporters that the two countries had resolved all related issues and merely put off the signing until the June visit. "Talks on natural gas have reached a culminating point, but we want to carry out the signing during President Ilham Aliyev’s visit to Turkey."
President Aliyev confirmed that Baku and Ankara had reached agreement, adding that the deal would be inked as soon as the joint taskforce has solved minor technical details.
"Issues between Turkey and Azerbaijan relating to gas transportation and sales have found their solution. Now, technical work is underway to prepare the agreement for signing," Aliyev said after meeting Erdogan.
Precise details of the gas deal are unknown but it is expected to at least resolve pricing differences over 6 billion cubic meters of gas Azerbaijan currently sells to Turkey.
The deal on gas supply and transit, two years in the making, could facilitate Azerbaijan’s gas exports to Western markets, in particular, by moving forward the ambitious 7.9 billion euro Nabucco pipeline project that seeks to trim Europe's energy reliance on Russian energy.
Turkey and Azerbaijan were mainly negotiating three issues: 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. Under the previous agreement, 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 project, which aims to pump gas from the Caspian and Central Asia regions to energy-thirsty European markets.
Prime Minister Erdogan said, further, that he had agreed with President Aliyev to establish a strategic cooperation council of the two countries. "One of the pivotal issues we decided upon with the honorable President was setting up a high-level strategic cooperation council. Our counterparts are currently working on its preparation. During Ilham Aliyev’s visit to Istanbul we will have the opportunity to put pen [to the document] together."
"This will be a very broad initiative and it will be the most remarkable step covering the future between Turkey and Azerbaijan," Erdogan said.
Turkish Minister of Energy and Natural Resources Taner Yildiz, who was part of the Turkish delegation, said prior to leaving for Baku that Ankara was seeking to hold a summit to discuss exports of Azerbaijani gas to Europe. According to him, Turkey has already held preliminary talks on the issue with Greece, and the high-level meeting is expected to take place soon. Yildiz said only the venue of the summit remains to be determined, and it is to be held either in Istanbul or Athens. The leaders of Azerbaijan, Turkey, Greece, and Italy are expected to attend.*