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    Azerbaijan inks new gas agreement with Turkey

Summary

A contract for deliveries from the Shah Deniz natural gas field expired in April.

by: Daniel Graeber

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Azerbaijan inks new gas agreement with Turkey

Azerbaijan's energy minister told the Reuters news service October 14 that a new agreement was signed to deliver natural gas from the country's offshore Shah Deniz field to Turkey.

Gas flows to Turkey from the Shah Deniz gas field in the Caspian Sea were reduced in April after one of the contracts covering those supplies expired. Azeri energy minister Parviz Shahbazov told Reuters a new deal calls for the delivery of some 2.5bn m3 for Turkey next year and 3.5bn m3 in 2023.

“We will be increasing gas supplies (to Turkey) from Shah Deniz 1 in addition to Shah Deniz 2,” he said.

BP leads the development of Shah Deniz. The company and its partners in July started production at the deposit's East South deepwater flank.

The project will produce 4.13bn m3/year at full capacity, a level that could be reached yet this year. That would bring the field's overall production rate to more than 24.8bn m3/yr.

The extra gas will help the Shah Deniz consortium fulfil its existing sales and purchase agreements.

The second phase of Shah Deniz came on stream in 2018, delivering natural gas to Turkey and Europe via the Southern Gas Corridor, whose final section, the Trans-Adriatic Pipeline, started delivering gas at the start of this year.

The Shah Deniz consortium comprises BP as operator with 28.8%, Turkey's TPAO with 19%, Azerbaijan's SOCAR with 16.7%, Malaysia's Petronas with 15.5% and Russia's Lukoil and Iran's NICO each with 10%.