Azerbaijan, Turkey eye Shah Deniz gas deal ahead of top-level meeting
BAKU. Sept 20 (Interfax) - Azerbaijan and Turkey expect to complete talks on the purchase-sale and transit of gas to be produced in phase two of the Shah Deniz project ahead of top-level talks in October, Rovnag Abdullayev, president of the State Oil Company of the Azerbaijani Republic (SOCAR), told reporters.
"There'll be a top-level meting in October, and we hope before then to complete the talks on the signing of agreements to export Azerbaijani gas to Turkey and on transit gas to Europe," Abdullayev said, adding that "experts are working on the documents."
SOCAR told Interfax that agreement in principle had been reached with Turkey to round the talks off by September 26.
The Shah Deniz project members are BP (operator, 25.5%), Statoil (25.5%), SOCAR (10%), Lukoil (10%), NICO (10%), Total (10%), and TPAO (9%). The development contract was signed on June 4, 1996.
Stage 1 development of the deposit involves the production of 178 billion cubic meters (bcm) of gas and 34 million tonnes of condensate. This phase of development includes agreements struck on sales of gas between Turkey, Georgia, and Azerbaijan. The 690-km pipeline was built to move Azerbaijani gas to Turkey (442 km in Azerbaijan and 248 km through Georgia).
The cost of Stage 2 is estimated at $20 billion. Annual extraction volume will be 16 bcm of gas. Initial Stage 2 output was planned for 2012, but in light of unresolved gas-transit issues, the timeframe has been pushed back to 2017.