Baku sees Turkey as tough customer on gas exports

PanARMENIAN.Net - Amid a diplomatic chill, Azerbaijan and Turkey opened a new round of talks November 16 on an energy export price. Recent agreements on gas supplies to Bulgaria, Iran and Russia suggest that Baku is exploring alternative export routes as a means to pressure Ankara into paying significantly more for Azerbaijani natural gas.



Baku and Ankara have been unable to fix a mutually acceptable gas price, even though talks have been going on since April 2008. Azerbaijan claims that the $120 per 1,000 cubic meters (tcm) that Ankara now pays, a price set in 2001, is 30 percent below international rate, and does not correspond with the fresh influx of production to come from Azerbaijan's Shah Deniz Stage II gas field. Baku is seeking to more than double the amount that Ankara pays, to $250/tcm, EurasiaNet reports.



Article further says that Azerbaijani President Ilham Aliyev in October declared that, given the stalemate with Ankara, Baku would consider alternative export options, including Russia, Iran and Bulgaria.



In an October 29 interview with CNN Turk, Turkish Energy Minister Taner Yildiz stated that the price Turkey pays for gas from Shah Deniz is being discussed as part of a package with transit rates for Azerbaijani gas traveling to Europe via Turkish pipelines. Ankara proposes that Baku pay a "fairly competitive" price of $2.36 for each 100 kilometers of Turkish territory crossed by 1,000 cubic meters of Azerbaijani gas - a price 24 cents lower than Russia's own tariff for the same distance, Yildiz claimed.



A diplomatic chill between the two longtime allies appears to be hampering efforts to settle pricing differences. The October 10 signing of protocols for rapprochement with Azerbaijani foe Armenia set Baku's nerves on edge; a tussle over Turkey's removal of Azerbaijani flags from a World Cup qualifier soccer match attended by Armenian President Serzh Sargsyan, and Azerbaijan's removal of Turkish flags from a Baku cemetery further deepened the sour feelings. All flags have since been restored, but suspicions seem to linger.