Baku talks Turkey over Nabucco while Medvedev Set to Arrive

Azerbaijan's state oil and gas company SOCAR said on Wednesday that it expects to iron out all details of a natural gas deal with Turkey by end-March 2011.

'By March 31, 2011, SOCAR and (Turkey's) Botas will agree all issues and sign three documents - on the purchase and sale of gas from Shah Deniz II, on transit, and the price of gas from Shah Deniz I,' commented SOCAR President Rovnag Abdullayev.

Azerbaijan and Turkey signed a memorandum of understanding on gas supply and transit this past June after two years of negotiations, though the finer details were left to be fleshed out afterwards. The conclusion of an agreement is critical for the progress of the Nabucco gas pipeline, which needs to secure supply from Azerbaijan.

SOCAR's announcement comes shortly after the announcement that Russian gas giant Gazprom and will sign a deal to increase supplies of Azerbaijani gas to Russia during the upcoming visit by Russian President Dmitry Medvedev to Baku.  Nabucco is competing with the Gazprom led South Stream project to secure Azeri gas.

Deliveries of Azerbaijani gas began on January 1 after Azerbaijan's GNKAR signed a contract with Russia's Gazprom in October 2009 to deliver 500 million cubic meters of gas annually up to 2015, with the option of renewing the contract in the future.

Later the companies agreed to double gas deliveries to Russia, bringing the total amount of gas delivery from Azerbaijan to one billion cubic meters. The companies will again double that amount to two million cubic meters in 2011.

Gazprom CEO Alexei Miller said in mid-June that Gazprom is prepared to "buy as much gas as Azerbaijan is ready to deliver."

Despite growing Russian interest in Azeri gas, Baku has said that it is ready to deliver half of its natural gas reserves to the Nabucco pipeline.

Source: RIA Novosti