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    Baku Explains Gas Imports Halt since September


A top official of Azerbaijan's state-run company, Socar, has exclusively told NGW the reasons for its halt to gas imports from two of its neighbours.

by: Dalga Khatinoglu, Ilham Shaban

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Baku Explains Gas Imports Halt since September

A top official at Azerbaijan’s state-run firm, Socar, has told NGW that the country has already stopped gas imports from both Russia and Turkmenistan and resumed its gas swap with Iran.

"Azerbaijan stopped Russian and Turkmen gas imports on February 1 and October 1, 2018 respectively," Socar's vice president for oil and gas transportation and gas facilities, Rahman Gurbanov, told NGW November 16.

According to its agreement signed November 2017, Baku should have imported 1.6bn m3 Russian gas, but instead imported just 0.349bn m3 in 2017 and 0.796bn m3 in 1Q 2018, he said.

Responding to a question about the shortfall in contractual imports (1.145bn m3 in total), he said that the agreement wasn’t a take-or-pay contract and that conditions were smooth.

Azerbaijan also signed an agreement with Turkmenistan in October 2016, which allows Iran to take Turkmen gas via its northeast borders and deliver to Azerbaijan and its Nakhchivan autonomous republic on its northwest border, deducting 15% of volume as a swap fee.

Gurbanov said that deal with Turkmenistan ended October 1, 2018, adding that Azerbaijan imported 1.751bn m3 in 2017 and 799mn m3 during January-September 2018 from Turkmenistan.

Before the Turkmen gas purchase deal, Azerbaijan was delivering 1.1mn m3 to Iran and the Islamic Republic was supplying the gas to Nakhchivan, also deducting 15% of the volume as a swap fee, based on an agreement signed in 2005. 

Gurbanov said that the gas swap with Iran resumed after the Turkmen gas deal ended. He stated also that Baku’s total gas imports in 2018 declined 24% year-on-year and it has no plan to resume imports because last winter was very mild and the country stored Russian gas in its underground storage facilities. Another contributing factor is the increase in Shah Deniz 1 production, with Azeri output set to increase further in 2019.

Azerbaijan’s total gas imports in 2018 have declined 24% year-on-year to date and it has no plan to resume imports, he added.

Gas storage inventory volume increased by 16% on year to 3.6bn m3 in October, of which 3.1bn m3 is recoverable, added Gurbanov, and is set to rise significantly again next year. Socar plans to expand its Karabakh gas storage facility by installing new compressors and drilling wells soon, as new pipelines have already constructed and tied into the storage facilities

Shah Deniz phase 1 increased production by 10.5% to 32mn m3/d since July, he added. In addition, Socar’s own production is expected to increase from Bulla Deniz field next year. He added that gas losses from the country's transmission system decreased by 10.3% year-on-year to 533mn m3 during the first nine months of 2018.