Report: Gazprom Starts Gas Supply to Azerbaijan (Updated)
Russia's Gazprom has started the supply of 6 million cubic meters per day of gas to Azerbaijan as of September 29, according to a report from Ria Novosti today.
Neither Gazprom Export LLC, or Azerbaijan Methanol Company (AzMeCo) which entered into a deal on September 11th, 2015 officially confirmed report.
However, the Magistral Gas Pipelines Department of SOCAR told Natural Gas Europe that Russia started delivery of 6 million cubic meters per day(mcm/d) of gas to Azerbaijan on September 29th through Haciqabul-Baku magistral gas pipeline. The source said that the total gas transit capacity of this pipeline is 12 mcm/d. "Currently, the Russian gas is transited through this 220-km pipeline to AzMeCo," he said.
AzMeCo was inaugurated in July 2013. Since August 2014, AzMeCo has produced and exported 191 thousand tons of methanol. British Petroleum has bought 80 percent of this volume at $328 per ton. SOCAR’s gas price for AzMeCo was $120 per 1000 cubic meters.
The plant is still working with half capacity, while the full production capacity of this plant is 720,000 tons per annum.
The Russian based Ria Novosti reported that under the recent five-year deal, Gazprom would supply up to 2 billion cubic metres of gas per year to Azerbaijan with the possibility of extension.
The report added that “the imports of Russian gas will meet the additional domestic natural gas needs of Azerbaijan due to economic growth”.
Russo-Azeri gas trade commenced in October 2000 when Azerbaijan started gas imports from Russian company Itera. Gazprom provided deliveries to Azerbaijan from 2004 to 2007.
Azerbaijan stopped gas import from Russia in the beginning of 2007, following the commencement of Shah Deniz Stage 1 project.
Then, SOCAR started gas export to Russia from 2010 to early 2015.
Azerbaijani gas exports to Russia reached 1.37 billion cubic meters per annum (bcm/a) in 2013, but plunged to 0.206 bcm/a in 2014.