SOCAR: commercial agreement cannot be revised unilaterally through mass media

Early this week Turkish Minister of Natural Resources and Energy said in his interview to local NTV channel that “next year Turkey will refuse of gas import from Azerbaijan and Iran on the basis of “take and pay” principle.”

This issue has been widely discussed the entire week both in Turkey and Azerbaijan. Azerbaijani media even emphasized that “all the roads pass through Turkey.”

However, revision of the effective agreements is not that simple.

A source from SOCAR’s Investment Department, which is in charge of commercial content of the contracts, told Turan’s correspondent that the current effective contract was signed between Azerbaijan Gas Supply Company (seller of Azerbaijani gas extracted from the Shah Deniz Phase 1 ) and Botas company (buyer of Azerbaijani gas on the Georgian-Turkish border). The commercial talks have been conducted by SOCAR, but interests of all partners of the Shah Deniz project, including TPAO company, have been taken into account.

“The agreement signed between AGSC and Botas has an international legal status and any revision of the agreement must be negotiated with all the partners. We have not been officially informed about Turkey’s intentions yet,” added the same source.

He added in conclusion that the commercial issues of the company cannot be solved through mass media and therefore, they doubt that the current agreement on purchase-sale of gas between Azerbaijan and Turkey could be revised.

A source from BP company told Turan that it also does not believe into revision of the contract with Turkey. “According to the current contract, Turkey has committed itself to buy as minimum 6.3 billion cub.m. of gas from the consortium, but during better times this volume did not exceed 5.1 billion cub.m. and lately it varied around 4 billion cub.m. This is despite the fact that Azerbaijani gas is the cheapest one at the Turkish market,” said the same source.

* According to the Turkish sources, Turkey imports Iranian gas at the price of $490 per 1000 cub.m., Russian gas - $425 per 1000 cub.m. and Azerbaijani gas - $335 per 1000 cub.m.—0—

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