Install

Get the latest updates as we post them — right on your browser

Today's paper. Last Updated: 02/13/2012

Aliyev Proposes Selling Gas to Europe

Medvedev gesturing at a news conference with Aliyev on Friday afternoon.��
Maxim Shipenko / Reuters

Medvedev gesturing at a news conference with Aliyev on Friday afternoon.��

Azeri President Ilham Aliyev said Saturday that he wanted Russia to serve as a transit route for his country to begin selling gas to Europe, a proposal that could please Western policymakers who have been looking to diversify their energy supplies.

The possibility surfaced a day after Aliyev met with President Dmitry Medvedev, who said there was a good chance for the countries to strike a gas accord. Last month, Gazprom and the State Oil Company of Azerbaijan, or Socar, agreed to start talks on Russia buying Azeri gas with "delivery at the border" as soon as next year.

The meeting came as Moscow has been trying to shore up support from other Caspian Sea gas suppliers to buck the Nabucco pipeline, which would bypass Russia but faces a number of obstacles to construction.

"It's very disappointing to have no opportunity to produce the gas that we have because transit issues haven't been resolved," Aliyev said in an interview with the Vesti state-television channel. "The main thing is to come to an agreement about the possible transit and sale of gas between Russia and Azerbaijan and move forward."

A Gazprom spokesman said Sunday that he could not immediately comment on the transit option.

The European Union would likely welcome the emergence of a new supplier from the east, albeit one dependent on Russian pipelines, especially since the completion of Nabucco remains in doubt.

The backers of Nabucco, a number of EU energy companies, plan to fill the pipeline with gas from Turkmenistan -- across the Caspian Sea from Azerbaijan -- or Iran. But the project has faced numerous problems, including disagreement over how to divide the energy-rich sea and suspicion in the West of Iran's nuclear program.

Transiting foreign gas would not be unusual for Gazprom, which until the end of last year carried Turkmen gas for sale to Ukraine. Those supplies were handled by RosUkrEnergo, a trader half owned by Gazprom.

Alexander Nazarov, an analyst at investment company Metropol, said it was not immediately clear what Azerbaijan would gain from a transit deal for European exports, since it would not make much more money than it would from direct sales to Gazprom.

During the talks in Moscow, Aliyev signaled that he had no objections to contributing to Nabucco as well -- if it's ever built.

"Provided the terms are good, we would be able to supply a portion of our gas in that direction," Aliyev said. "But it's difficult to say when this project will move from a standstill."

Initial supplies from Azerbaijan to Russia would be far smaller than the flow from Turkmenistan, with flows capped by the pipeline's current capacity of 5 billion cubic meters per year. Gazprom and Socar agreed last month to inspect the link, which Gazprom used to export gas to Azerbaijan before 2007, to determine the amount of investment required for any repairs.

Turkey buys and transits a total of 7 bcm of Azeri gas per year.

Azerbaijan has the potential to raise output by another 12 bcm to 14 bcm per year from the second phase of the Shah Deniz field, which is led by Norway's StatoilHydro, Aliyev said. The field will produce that much more once the company finds a market and a transit route for the gas, he said.

StatoilHydro's chief of exploration and production, Peter Mellbye, said earlier this month that the company was considering exports through Russia and Iran. Azerbaijan has not been able to agree with Turkey on expanding the current transit to Greece.

Recent frictions over relations with Armenia have dimmed any hope for a future deal with Turkey. Alarmed that Turkey may lift an economic embargo against Armenia, Aliyev punctuated his displeasure by ignoring a summit in Ankara earlier this month attended by U.S. President Barack Obama. Turkey imposed the embargo in the 1990s as a show of support for Azerbaijan in its efforts to win back possession of the pro-Armenian separatist enclave of Nagorno-Karabakh.

Aliyev also said any gas agreement should not be subject to revisions, apparently wary of Russia's ongoing dispute with Turkmenistan over a cut in purchases. Turkmenistan has said a Gazprom unit failed to give it adequate warning before cutting the amount of gas it would accept, leading to a pipeline rupture earlier this month.

Prime Minister Vladimir Putin met with his top energy deputy, Igor Sechin, and Gazprom chief Alexei Miller on Thursday and told them to step up talks with Central Asian suppliers after Turkmenistan signed a tentative supply deal with Germany's RWE, a member of the Nabucco project.

"The agreement must be such that it isn't subject to revisions by any of the parties later," Aliyev said.

Also in News

Report: United Russia Might Be Dismantled

United Russia, the country's dominant political party for more than a decade, might be radically reformed or even dissolved in the coming months.

Police Chief Sacked In Reform Shake-Up

The head of the St. Petersburg police was sacked following an investigation into the beating death of a 15-year-old boy while in custody, amid an ugly power struggle that came to head at the annual meeting of police brass with President Dmitry Medvedev.

Putin Aide: Corruption Was 'Civilized'

Corruption in Russia was "normal" and "civilized" during Vladimir Putin's first stint as president and support for him has grown stronger as a result of recent opposition rallies, the prime minister's campaign manager has boasted.

Houston's Death Felt In Russia

Russians joined the world Sunday in mourning the death of singer and actress Whitney Houston, who passed away suddenly at the age of 48.

Woman Ignites Herself

A 56-year-old woman from the Urals set herself on fire in front of the White House on Sunday, two weeks after Prime Minister Vladimir Putin visited her region for a rally supporting his presidential bid.

Sentence of 13 Years Meted Out For Spying

A military court on Friday convicted a Russian officer of providing the CIA with secret information on Russia's new intercontinental ballistic missiles and sentenced him to 13 years in prison.




Discussion
The Moscow Times welcomes your comments and invites you to discuss topics with other readers. Your comment will be posted automatically to enable a live discussion. If you aren't familiar with our comments policy, you can read it here.

If you're a registered user, you can start typing your comment below. If not, take a moment to sign up. and then return to the article.

If your comment doesn't appear, contact us by using our web form.

Comments

Comments via Facebook

print


Comments

This article has no comments.

Be the first to leave a comment





Most Read