Azernews.Az

Azerbaijani state oil company SOCAR favors long-term contracts on gas supply, the head of SOCAR Rovnag Abdullayev told journalists on Wednesday.

"Gas supplies should be long term. The supply through pipelines is based on long term contracts which allow us to make long term forecasts," Abdullayev said.

According to him, the changes in the gas market are related to the increasing importance of shale gas and compressed natural gas issues. The processes in the world market are reviewed and analysed by SOCAR.

Abdullayev's added that shale gas will not enter the European market in a short run as the cost in Europe is still very high.

Azerbaijan is in the process of making a route selection for gas supplies to the European market. Partners on the development of Shah Deniz and Azerbaijani gas condensate field are considering two possible transportation projects of Azerbaijani gas to Europe - Nabucco West and Trans Adriatic Pipeline (TAP).

Within the second stage of Shah Deniz's development, six billion cubic meters of gas will be exported to Turkey with another 10 billion being delivered to Europe.

Reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas.

The contract on development of Shah Deniz offshore field was signed on 4 June 1996. The contract participants are BP (operator) - 25.5 per cent, Statoil - 25,5 per cent, NICO - 10 per cent, Total - 10 per cent, Lukoil - 10 per cent, TPAO - nine per cent and SOCAR - 10 per cent.