Azernews.Az

BAKU – The State Oil Company of Azerbaijan, SOCAR, and Russia's gas major Gazprom failed to reach agreement on gas prices for 2011.

Russian Trade Representative in Azerbaijan Yuri Shchedrin told a news conference in Baku on Wednesday that negotiations are still continuing.

"The talks on Azeri gas sales to Russia are still underway and we have not come to an agreement yet. The reason for this is gas sale price."

Mr. Shchedrin also pointed out that Azerbaijan has to improve the gas compressor to increase the gas exports to up to 2bn cubic meters in 2011. He said the SOCAR has already started the upgrade.

"Gas supplies may reach 2bn cubic meters if the both countries come to agreement."

SOCAR and Gazprom have already agreed on the amount of gas to be exported to Russia next year. In 2010, Azeri gas exports to Russia is expected to reach 1bn cubic meters.

The agreement on Azerbaijani gas sales to Russia for the period of 2010-2014 was signed by SOCAR and Gazprom in Baku on October 14, 2009. Under the contract, Azerbaijan has to supply no less than 500mln c. m. of gas to Russia annually. Azerbaijan began gas exports to Russia on January 1.

SOCAR said it exported more than 494.6mln c. m. of gas to Russia in January-July.

In July, Russia has received over 66.4mln c. m. of Azeri gas, which is less than in previous month (81.54mln c. m.).