Azernews.Az

BAKU – An agreement on the exports of Azerbaijani natural gas through Turkey to Europe may be signed in September, Turkish Ambassador in Baku Hulusi Kilic said Tuesday.

Kilic said that during Turkish Prime Minister Recep Tayyip Erdogan’s visit to Azerbaijan last week, the two countries agreed at a meeting of officials of the Azerbaijani state energy firm Socar and the Turkish energy minister to quickly finalize the ongoing talks on a transit deal. Kilic added that only some "technical matters" remain to be resolved to sign an agreement, but he did not elaborate.

A transit deal with Turkey will allow resource-rich Azerbaijan to export 10 billion cubic meters of gas a year to European markets during the second stage of developing the giant Shahdaniz field in the Caspian Sea. First gas during Phase 2 of the Shahdaniz project is to be produced in 2017.

Baku is currently in talks with potential buyers and transit states. But the signing of agreements with European importers and sanctioning of the second stage of Shahdaniz development is expected only after Azerbaijan signs a transit deal with neighboring Turkey.

Socar official Vagif Aliyev said earlier that most of the details of the contract, including transit fees, volumes of gas and transportation options, have been finalized, but differences remain over what legal jurisdiction will govern the deal, Today’s Zaman reported.

Stressing that the Shahdaniz II investment may amount to $25 to 30 billion with the construction of pipelines, Aliyev said an investment of this magnitude must be secure, and one of the means to achieve such security is a "solid legal jurisdiction" to protect the interests of all partners. He also said the legal rules governing the deal could be British or Swiss.

Azerbaijani gas will be exported to Europe as part of the Southern Gas Corridor, which includes a slew of ambitious projects supported by the European Union, including the Nabucco gas pipeline.

The Shahdaniz field holds estimated reserves of 1.2 trillion cubic meters of gas.

Shahdaniz shareholders are: BP (operator - 25.5 percent), Statoil (25.5 percent), NICO (10 percent), Total (10 percent), Lukoil (10 percent), TPAO (9 percent) and Socar (10 percent).