Baku, Moscow strike gas deal
Russian gas giant Gazprom clinched a deal Monday to buy natural gas from ex-Soviet Azerbaijan, as Moscow seeks to extend its grip on potential European energy supplies in the resource-rich Caspian Sea.
The agreement was signed by Gazprom chief executive Alexei Miller and Azerbaijani national energy company chief Rovnag Abdullayev in the presence of Russian President Dmitry Medvedev and his Azerbaijani counterpart Ilham Aliyev.
"I think that we will be able to take this work further, in view of greater opportunities and greater volumes, which will be increased," Medvedev told journalists in Baku.
Miller said Gazprom's purchases would start at 500 million cubic meters of gas annually as of January 1, 2010, with the agreement allowing for supply levels to increase later.
"The price will be commercially attractive for Azerbaijan because we are neighboring countries so there are no transit states between us," Miller said, without providing further details.
"We can therefore begin to buy the gas quickly. There is already a gas pipeline between us," Miller said, adding that the gas would be used for Russian domestic consumption.
Miller said the deal will also see Gazprom listed as a preferential buyer for gas from the second development phase of Azerbaijan's enormous Shah Deniz offshore field. "Among all potential buyers, preference will be given to Gazprom and the others will have to offer a more interesting price," he said.
Production at the Shah Deniz field, estimated to contain up 1.2 trillion cubic meters of gas, began in 2006 and a second phase of development is expected to see production ramp up by 2015.
Monday's deal could cast doubts on the viability of the European Union's ambitious Nabucco pipeline project, aimed at bypassing Russia to deliver Caspian Sea gas to western Europe, AFP reported.
The agreement was signed by Gazprom chief executive Alexei Miller and Azerbaijani national energy company chief Rovnag Abdullayev in the presence of Russian President Dmitry Medvedev and his Azerbaijani counterpart Ilham Aliyev.
"I think that we will be able to take this work further, in view of greater opportunities and greater volumes, which will be increased," Medvedev told journalists in Baku.
Miller said Gazprom's purchases would start at 500 million cubic meters of gas annually as of January 1, 2010, with the agreement allowing for supply levels to increase later.
"The price will be commercially attractive for Azerbaijan because we are neighboring countries so there are no transit states between us," Miller said, without providing further details.
"We can therefore begin to buy the gas quickly. There is already a gas pipeline between us," Miller said, adding that the gas would be used for Russian domestic consumption.
Miller said the deal will also see Gazprom listed as a preferential buyer for gas from the second development phase of Azerbaijan's enormous Shah Deniz offshore field. "Among all potential buyers, preference will be given to Gazprom and the others will have to offer a more interesting price," he said.
Production at the Shah Deniz field, estimated to contain up 1.2 trillion cubic meters of gas, began in 2006 and a second phase of development is expected to see production ramp up by 2015.
Monday's deal could cast doubts on the viability of the European Union's ambitious Nabucco pipeline project, aimed at bypassing Russia to deliver Caspian Sea gas to western Europe, AFP reported.
