SOCAR to provide Iran with gas

SOCAR (State Oil Company of the Azerbaijani Republic) will launch a
new compression facility in Astara and will start providing gas
supplies for Iran. A long-term contract was signed with the National
Iranian Gas Exporting Company (NIGEC), Head of SOCAR's Azeringas Akper
Gadzhiyev said, Trend reports.

Azerbaijan provides Iran with some 1.5 million cubic meters of gas
daily, in form of swap operations of gas to Nakhchivan Autonomy.

SOCAR and NIGEC signed a long-term contract in Baku on January 12. The
contract lasts 5 years. Azerbaijan will provide Iran with 1 billion
cubic meters of gas in 2011. The quantity will be increased in the
next years.

The document was signed by SOCAR President Rovnag Abdullayev and NIGEC
Director General Javad Odji.

Azerbaijan and Iran are connected with the
Gazi-Magomed-Astara-Bind-Biand pipeline, which is 1474.5 km long.
296.5 km run through Azerbaijan. It is a branch of Gazakh-Astara-Iran
pipeline, launched in 1971. There are three compression stations: in
Gazi-Magomed, Agdash and Gazakh. The pipeline diameter is 1200mm.
Azerbaijan does not plan to increase prices.

The gas price for Azerbaijani consumers is 100 manats per 1000 cubic
meters of gas.

Azeringas will sign a memorandum within the framework of the project
for the reconstruction and modernization of the gas-distribution
system of Baku and Apsheron Peninsula in late February.

RWE and E.ON introduced proposals on the project. Their officials are
in Baku. A memorandum on establishing a joint venture will be signed
with one of them, Gadzhiyev said.

He said that realization of the project may require 800-900 million
euro and will take 10 years.

The gas system of Baku and Absheron Peninsula is one of the biggest in
the country and covers approximately 650,000 consumers. Reconstruction
and modernization of the system will have 90% of the infrastructure
renovated.