Turkish-Azeri gas pipeline to be laid from Igdir to Nakhchivan

A group of specialists will be created to lay gas pipeline from Igdir (Turkey) to Nakhchivan (Azerbaijan).
The State Oil Company of Azerbaijan (SOCAR) reports that early September 2009, the group of specialists will be created to lay gas pipeline, running from Igdir to Nakhchivan. SOCAR reports that in the 8 August negotiations in Nakhchivan the parties covered only commercial issues of gas production within the first and second stages of development at gas condensate field Shah Deniz (Azerbaijani sector of the Caspian Sea). The subject of talks was also volume and price of Azeri gas for Turkey and issues of its transit through this country's territory.

An interest to buy Azeri gas is displayed by Russia, Iran, Syria and a range of other European states. Minimum volume of demand is estimated in 7-16 bn cm and maximum one is almost not restricted and depends only on capacity of Azerbaijan whose gas resources are estimated in at least 2 tcm (in accordance with new estimations up to 5 tcm) to extract it.
On 10 July, the SOCAR president conducted negotiations in Turkey with this country's energy minister Taner Yildiz. He also met with BOTAS management to discuss co-operation and realization of regional projects. In the meetings in Turkey it was also discussed SOCAR's activity in this country and commercial issues of Azeri gas supplies (including within Stage 2 of Shah Deniz Project).

SOCAR continues dreary negotiation process with Turkey's BOTAS about a new gas price for Turkey within Phase 1 of Shah Deniz Gas Project (Azerbaijani sector of the Caspian Sea).
Vagit Aliyev, the head of the SOCAR Investment Department, says that the SOCAR's major goal in the course of negotiations with BOTAS is to obtain price formula linked with oil prices at world market. The Turkish market applies price formulae connected with oil prices for Russian and Iranian gas.

"We don't want to talk of any concrete figure. We want application of gas price change depending on change of prices for oil. Azerbaijan wants to receive maximum price for its gas that would conform to existing prices for gas at the Turkish market," he said. The SOCAR representative added that averaged gas price at the Turkish market on formula of dependence on oil price existed 6 months ago totalled $ 320-330 per 1,000 cm.
"Now it will increase taking into account oil prices at the level of $ 70 per barrel," Aliyev said.

The new price for gas of Shah Deniz field for Turkey supplied since 15 April 2008 should be calculated on a new formula.
Currently it does not exceed $ 120 per 1,000 cm.