Azerbaijan Suspends Gas Deliveries to Russia for 2015
Azerbaijan made an almost 7-hold decrease in gas deliveries to Russia last year. Most recently, an official told Natural Gas Europe that Baku will not export any natural gas to Russia in 2015.
A government official who wishes to remain unnamed said that decision of suspending gas delivery to Russia in 2015 made up due to the increase of domestic gas consumption level.
The State Oil Company of Azerbaijan (SOCAR) delivered only 207 million cubic meters of gas to Russia during last year, while this figure was 1.37 billion cubic meters in 2013.
The reason of decreasing gas export to Russia in 2014 was explained officially “due to temporary interruptions caused by road construction projects in northern regions.”
Azeri official said that the domestic gas usage increase has occurred in Azerbaijan’s housing and industrial sectors.” Azerbaijan Methanol Company (AzMeCo) is increasingly using natural gas feeds while Holchim Open joint-stock company’s cement plant in Azerbaijan has raised the production level.
AzMeCo was inaugurated in July 2013. Since August 2014, AzMeCo has exported 100 thousand tons of the produced methanol to the world markets. The plant is still working with half capacity, while the full production capacity of this plant is 720,000 tons per annum.
Holcim (Azerbaijan) OJSC, is also a part of Switzerland’s Holcim Group that is one of the leading cement and clinker manufacturing company in Azerbaijan.
Decreasing and then suspending of Azerbaijani gas deliveries to Russia came while Azerbaijan has increased gas export volume to Turkey since 2014.
Azerbaijan exported 62 percent of produced gas from Shah Deniz Stage 1 (SD1) during the last year however figures were projected to reach 70 percent in 2015. SD1’s gas production would be 9.8 billion cubic meters (bcm) in current year.
In total, Azerbaijan has planned to increase gas production level from 29.7 bcm in 2014 to 30.2 bcm in 2015.
However, SOCAR’s own gas production is expected to decrease from 7.2 bcm in last year to 6.5 bcm in 2015.
SOCAR is responsible to export gas to Russia.
Azerbaijan started gas delivery to Russia in 2010 due to a 5-year long agreement, signed between SOCAR and Gazprom in October 2009. However, the sides had agreed to extend the agreement each year after 2015.