Turkey, Azerbaijan sign deal on Europe gas transit
Turkey and Azerbaijan on Monday signed a long-awaited deal on
the transit of gas to Europe seen as crucial to plans to reduce the
continent's dependence on Russian gas, AFP reported.
The memorandum of understanding sets the tariffs Turkey will charge
for the transit of Azerbaijani gas to Europe and also fixes the
price of gas that Azerbaijan sells to Turkey, Turkish Energy
Minister Taner Yildiz said after inking the document with his
Azerbaijani counterpart Natig Aliyev.
"Azeri gas is a very important source in meeting the needs of
Turkey and European countries in the coming period in terms of
energy security," Yildiz told reporters in Istanbul.
The agreement will open the way for securing supplies to the
European Union's flagship Nabucco gas pipeline project, he added as
his Azerbaijani counterpart described the accord as "historic."
The signing ceremony was also witnessed by Turkish Prime Minister
Recep Tayyip Erdogan and Azerbaijani President Ilham Aliyev, who is
in Turkey to attend a meeting of an Asian security grouping on
Tuesday.
The agreement fixes the price and amount of gas to come from the
second phase of production at Azerbaijan's vast Shahdaniz field,
expected to begin in 2016 at the earliest, Yildiz said.
According to him, Turkey will buy 6 billion cubic meters of
Azerbaijani gas annually within Phase 2 of Shahdaniz
development.
The minister said 13.5bn cubic meters of gas a year will be
produced during this stage.
"This means that the gas within the second stage can be a source
for such projects as Nabucco, ITGI (Turkey-Greece-Italy) and TAP
(Trans-Adriatic gas pipeline)," the minister said.
The minister refused to disclose the financial details of the deal,
as it might affect the sale of gas to other buyers.
Yildiz said that the cost of Azerbaijani gas will be more
acceptable compared to the price for Russian gas.
Depending on the market, the prices for Azerbaijani gas will
change, he said.
The 3,300-kilometer Nabucco pipeline between Turkey and Austria,
scheduled to be completed by 2014, is the key component of the EU's
ambitious Southern Corridor plan to bypass Russia in bringing
Caspian Sea gas through Turkey to Europe.
Energy-rich Azerbaijan is seen as a key potential supplier for
Nabucco, which is competing with Russia's South Stream pipeline
project to meet gas demands in Europe.
Ilham Shaban, who heads the Oil Research Center, says the agreement
between Turkey and Azerbaijan brings Azerbaijan closer to the EU
economically, as Europe will now be able to buy Azerbaijani gas on
its border – from Turkey. Moreover, this deal will pave the way for
expanding the South Caucasus republic’s trade with Europe, the
analyst said.
"If 10 billion cubic meters of gas a year are transported to Europe
from Azerbaijan, with the average price being $250 per 1,000 cubic
meters, this amounts to additional funds to the tune of $2.5
billion."
Shaban said that, presumably, European countries have already begun
making preparations to receive Azerbaijani gas. This conclusion is
enabled by the fact that during the annual Caspian oil and gas
conference held in Baku last week, discussions centered on the gas
issue and the Azerbaijani state energy firm SOCAR held one-on-one
meetings with foreign energy companies.*