Turkey pays off second portion of debt

Turkey has paid off the second tranche from the debt on the price
difference for imported gas to Azerbaijan, which began on 15th April
2008, for gas supplies from the Stage-1 project on Shakh-Deniz, Turan
reports.

The second tranche is equal to $500 million. The Turkish State
Pipeline Company (the buyer of Azerbaijani gas on the Georgian-Turkish
border) will pay the final tranche, worth approximately $400 million,
in late 2010 or early 2011. Turkish state company TPAO has a 9% share
in the Shakh-Deniz project.

Last week the Turkish Energy Minister, Taner Yildiz, visited Japan. He
said that Turkey paid $1 billion for Azerbaijani gas from Stage-1.
He said that Greece will pay Turkey $190 million for supplying it with
Azerbaijani gas in 2011.

Baku and Ankara signed an agreement on 7th June 2010. According to the
deal, Turkey purchases Azerbaijani gas in a new format. The previous
contract had a price for Stage-1 gas of $120 for 1000 cubic meters.
The contract was signed in March 2001, when the gas price was
approximately $100 for 1000 cubic meters. Turkey agreed on the new
formula on 15th April 2008, but started importing it on 3rd July 2007.
This is where the debt came from. It needed to pay extra up to $120
for every 1000 cubic meters of Azerbaijani gas.


Some Turkish media reported that Turkey purchases gas at $300 per 1000
cubic meters. SOCAR (the State Oil Company of the Azerbaijani
Republic) has denied the information. Turan says that Turkey pays $250
for 1000 cubic meters. The prices change and vary at an interval of
$260-270. The cold weather on December 1 caused the price of 1000
cubic meters of liquified gas to rise to $330 (up to $337 in the UK),
while the average price for Gazprom gas in Central Europe in the 4th
quarter reached $317.

Turan says that Turkey imported 14 billion cubic meters of Azerbaijani
gas from 3rd July 2007 to late 2010. By early June it had imported
approximately 10 billion cubic meters. This means that Turkey pays
$140 per 1000 cubic meters (the debt is $1.4 billion). Turkey pays an
average price of $260 per 1000 cubic meters. In the fourth quarter
prices for oil rose. The price for Brent oil in the first three weeks
of December reached over $92,while in the first quarter of 2011 gas
prices for Turkey will rise.