Azernews.Az

(Newswires, August 8) – Azerbaijan and Turkey are expected to hold talks on transportation of Shah Deniz gas on August 26, the Head of the Azerbaijan State Oil Company (SOCAR), Mr. Rovnag Abdullayev, was quoted as saying on Monday.

He said the talks were resumed after Turkish PM Recep Tayyip Erdogan’s recent visit to Baku.

"The partners of SOCAR, BOTAS and Shah Deniz project held a three-day meeting during the Turkish PM’s visit, where most of the outstanding issues were discussed and some progress was achieved".

Mr. Abdullayev added that there were a number of issues not solved yet.

"Next stage of talks will start on August 26 and I think we will be able to mull a large package of documents", he said.

Earlier, Turkish Ambassador in Baku, Mr. Hulusi Kilic, was quoted as saying by media that Azerbaijan and Turkey are expecting to finalize a transit deal on Azeri gas supplies to Europe by September.

According to the transit deal, Azerbaijan will sell 10 billion cubic meters of Shah Deniz gas per year directly to Europe via Turkey.

Azerbaijan has to reach a transit agreement with Turkey to transport its gas to Europe.

SOCAR is currently holding talks with potential buyers of Azerbaijani gas. SOCAR said that Azerbaijan and Turkey reached agreement on most of the outstanding issues, including transit fees, gas volumes, and transportation routes. However, disagreement on some legal issues is still hampering the signing of the final agreement.

SOCAR Foreign Investments Department chief, Mr. Vagif Aliyev, said the investments in the Shah-Deniz project, which can total $30 billion, should be safeguarded. A solid legal framework is needed to protect the interests of all parties involved, he added.

Shah Deniz is expected to start producing gas from 2017. Its total reserves are estimated at 1.2 trillion cubic meters of gas.

The contract to develop the offshore Shah Deniz gas field was signed on June 4, 1996 between BP (operator) - 25.5 percent, Statoil - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent and SOCAR-10 percent.

Under the contract, Turkey should annually receive 6.6 billion cubic meters of gas from Shah Deniz.