Azerbaijan, Turkey willing to reach agreement on cost of gas in early June: ambassador

Azerbaijan plans to increase prices on gas exported to Turkey as a part of Shah Deniz I.

Turkey buys Azerbaijani gas at $120 for 1,000 cubic meters. The contract also stipulates that the gas price can be considered a year after the supplies is launched. So, new prices (which the sides are negotiating) will be applied from April 15, 2008.

Under the contract, 6.6 billion cubic meters of gas will be transported to Turkey via Baku-Tbilisi-Erzurum per year as part of the Shah Deniz-1. Shah Deniz partners plan to achieve this volume in 2009.

The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. The sides to the contract are ?? (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%). Field's reserves are estimated at 1.2 trillion cubic meters of gas. The daily production is 22 million cubic meters. The daily production will reach 27 million cubic meters soon due to launch of new well.

/Trend Capital/