Ankara reiterates September deadline for Baku gas deal

Ankara reiterates September deadline for Baku gas deal

Turkey wants to reach agreement by the end of September on the purchase and transit of gas to be produced at Azerbaijan’s Shah Deniz field.

Azerbaijan is negotiating with Turkey to sell 6 billion cubic metres (bcm) of gas per year from the second phase of development at the giant Shah Deniz field and to ship 10 bcm to European customers via Turkey.

Turkish Energy Minister Taner Yildiz referred to the September deadline in an interview with Reuters on Wednesday.

“I have recommended to our friends to speed things up,” Yildiz said, referring to all the parties involved. “We want this to be signed even earlier.”

“We, as the Turkish Republic, have done all we can. To kickstart, to speed up this project, this [deal] needs to be signed.”

Azerbaijan and Turkey are to start the next round of talks on the package of gas agreements on 26 August, the president of Azerbaijan’s state oil company SOCAR said earlier this month.

Rovnag Abdullayev was confident that real progress would be made at the talks.

Talks resumed during Turkish Prime Minister Recep Tayyip Erdogan’s visit to Baku in late July after a break caused by the 12 June elections in Turkey. The talks had also hit a snag over jurisdictional issues and legal rights, SOCAR executives told Turkish journalists in July.

All the export options for Shah Deniz gas currently under consideration involve Turkey as a transit country. The agreements are crucial to a number of projects, including the EU-backed Nabucco pipeline.

The reserves at Shah Deniz are estimated at 1.2 trillion cubic metres. Production started in 2006 and the second phase will be launched in 2017. Azerbaijan is negotiating with over 20 companies and consortiums about supplies of gas from the second phase of Shah Deniz.

In his interview with Reuters, Energy Minister Taner Yildiz also said that Turkey was demanding reduction of gas prices from Russia, listing it as the main provision for extension of an agreement on a gas pipeline with an annual capacity of 6bn cubic metres, going though Ukraine. The agreement expired in June and Turkey and Russia decided to agree on the future gas pipeline by late August.

Ankara has several requirements related to this gas pipeline, Yildiz said.

He said Gazprom had raised prices by 39% over the past 29 months.

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