Azerbaijan and Turkey sign memorandum on gas pipeline construction to Europe

Azerbaijan and Turkey on Monday have signed a memorandum of understanding on establishment of a consortium to build a pipeline to transport gas from the Shah Deniz Field in Azerbaijan, within stage 2 of the project, through Turkey, 1news.azreports.

A set of export deals were signed in Izmir on October 25, 2011 for Turkish gas purchases in Azerbaijan and transit to Europe.

The deals include an intergovernmental deal, a deal on gas sales between the State Oil Company of the Azerbaijani Republic (SOCAR) and Botas International Ltd (BIL), an agreement with Botas on gas supplies, a SOCAR-Botas transit deal and a framework deal on rules of transit through Turkey.

Botas pipelines will be used for transit on condition of modernization or construction of a new gas pipeline. Azerbaijani President Ilham Aliyev and Turkish Prime Minister Recep Tayyip Erdogan were at the signing. Signatures were put by Azerbaijani Minister for Industry and Energy Natig Aliyev and Turkish Minister for Energy and Natural Resources Taner Yildiz, SOCAR President Rovnag Abdullayev, regional President of BP in Azerbaijan, Georgia and Turkey, Rashid Javankhir, and Botas Director General Fazil Shenel.

SOCAR reports that the document forms the legal basis for gas sales from Shah Deniz to Turkey and its transit to Europe.

Gas extraction from Shah Deniz-2 is planned to start in 2017. Out of 16 billion cubic meters extracted, 6 billion will be sold to Turkey, 10 billion to Europe. The development of Shah Deniz involves BP (operator – 25.5%), Statoil (25.5%), SOCAR (10%), LUKOIL (10%), NICO (10%), Total (10%) and TPAO (9%).