AZERBAIJAN HAS NO EXTRA GAS FOR GAZPROM
Elena Mazneva
RusData Dialine – BizEkon News
June 1, 2009 Monday
Russia
The State Oil Company of Azerbaijan is ready to start supplying
gas for Gazprom as early as 2010, but not more than 1 billion cubic
meters, company department chief Vagif Aliyev said yesterday. Russia,
of course, had bargained for more, said an Energy Ministry official,
but he gave no figures: Energy Minister Sergei Shmatko is planning
to discuss the issue in Baku today.
Azerbaijan is a potential supplier of gas for the Nabucco gas pipeline,
which is expected in 2013 to link the Caspian region with Europe,
bypassing Russia, and cut the EU’s dependence on Gazprom. Azerbaijan is
the only CIS country exporting gas, but not to Gazprom, thus upsetting
its monopoly on fuel purchases on the post-Soviet space.
Azerbaijan can conclude a 20- to 30-year agreement with Russia, but
the stumbling block is the price, the country’s Minister of Industry
and Energy Natig Aliyev said the other day. Gazprom is prepared to
pay the so- called European price (including a 15% to 20% margin for
itself), but Azerbaijan wants to know what this means, the minister
said. For comparison: in 2008, Gazprom’s average price for Europe
was $409 per 1,000 cu m, while Azerbaijan exported most of its gas
to Turkey at $120.
The Europeans are promising Azerbaijan much more than Russia –
investment and technology, and this means Gazprom might fail to get
extra gas, says Chingiz Ismailov, head of the Center of Regional
Development in Azerbaijan. Azerbaijan remembers how in 2007, when the
republic still depended on Gazprom’s imports, the company planned
to cut supplies and raise the price to $235 – twice as high as for
Armenia.
However, Azerbaijan so far has no surplus fuel for Gazprom. The
republic’s annual gas output is about 20 billion cu m. Domestic
consumption, as estimated by Gazprom, is 12 to 14 billion cu m. Another
7 billion cu m must be exported to Turkey.
>From an economic standpoint Gazprom would do better not to buy Azeri
gas at all, says Mikhail Korchemkin, director of East European Gas
Analysis. The corporation is already losing profit from the resale
of gas from Turkmenistan, Uzbekistan and Kazakhstan (about 60 billion
cu m a year). But from a political perspective, Gazprom needs it all,
he added.