Azernews.Az

Russian giant Gazprom's buying natural gas from Azerbaijan is quite realistic, the company's head Alexei Miller said.
"We consider reaching a long-term agreement on the gas purchases quite possible," he told an annual shareholders meeting last week.
Miller said Gazprom had held talks with the Azerbaijani leadership on buying gas to be produced from the country's major offshore field Shahdaniz. The Russian company said it was ready to pay market prices.
Miller emphasized that infrastructure was available for Russia's imports of Azerbaijani gas.
We recall that Russia's proposal to buy all of the gas exported by Azerbaijan was presented to President Ilham Aliyev during Miller's visit to the country early in June, and Baku sought time to mull it over. The proposal came as a surprise, as this would question Azerbaijan's participation in the West-backed NABUCCO pipeline project that will take its gas to Europe. Gas produced from the Shahdaniz field in the Caspian Sea is at stake. The field's reserves of 1.2 trillion cubic meters are one of the key sources to fill the pipeline. The West is upbeat on implementing the project and is in talks with Azerbaijan and other littoral states to move it forward. Gazprom, which has a monopoly in European markets, is striving to take control over the natural gas resources of Azerbaijan and Central Asian states to maintain its tight grip on global supplies. The company has already signed a long-term contract with Turkmenistan on buying its gas. Gazprom has also announced it planned to launch construction of the rival South Stream pipeline soon.
Baku is expected to issue its response to the gas imports proposal during Russian President Dmitry Medvedev's official visit to Azerbaijan due early in July.
The Azerbaijani government has no reason to decline the proposal in terms of commercial considerations. Russian media reported that Gazprom is offering $300 or more per 1,000 cubic meters of Azerbaijani gas -- a price that cannot be offered by other potential buyers. However, accepting the offer is a quite complex decision from the political standpoint.
The sales of Shahdaniz gas to Russia could face roadblocks in light of disagreement of the project participants.
The shareholders of the consortium on the project are not ready for the emergence of gas behemoth Gazprom as a buyer, said Christian Hausken, Country Manager for StatoilHydro, commercial operator of the project.
"First, we have to figure out what is involved, and then pass a decision," he said.
Gazprom said earlier it was seeking to buy all of the gas to be extracted during Phase 2 of Shahdaniz development, which is due to start in 2013. But as is seen from the Statoil executive's statement, both routes for the transportation of gas will bypass Azerbaijan's giant northern neighbor and gas will instead be exported to world markets through the NABUCCO and Greece-Italy pipelines.
The Shahdaniz project operator, BP Azerbaijan, predicts production from the field at 12-16bn cu. m. during Phase 2, but Azerbaijani officials say the figure could be increased to 30bn cu. m.
The number of countries seeking to buy gas from resource-rich Azerbaijan is rising amid increasing demand for energy resources in world markets. Turkey, Iran, Georgia, Israel and a number of European states are interested in the purchases as well.