Russia: Alexey Miller and Rovnag Abdullayev Agree to Increase Azerbaijani Gas Purchases

Saint Petersburg hosted a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Rovnag Abdullayev, President of the State Oil Company of Azerbaijan Republic (SOCAR).

The parties addressed the results of cooperation in 2010. Gazprom and SOCAR agreed that the joint efforts to supply natural gas from Azerbaijan to Russia had been a success. It was noted that the specified route of Azerbaijani gas deliveries was the most safe and reliable one.

The meeting confirmed that the gas purchase volume would equal 2 billion cubic meters in 2011. Both chief executives resolved to promote successful and fruitful cooperation and to purchase more gas in 2012 above the amount previously agreed upon in the contract addendum of September 3, 2010. An accord was reached that Azerbaijani gas purchases would be based on the price formula linked to the oil basket price and have no long-term restrictions on the purchase volume.

Based on the meeting results, Alexey Miller and Rovnag Abdullayev stressed that fostering the interaction between Gazprom and SOCAR was strategically important for cooperation between the two countries.

“Cooperation on gas issues between Azerbaijan and Russia is the most commercially viable option for both partners. There are no obstacles for Gazprom to ensure feasibility for a further increase in the Azerbaijani gas import at any moment coordinated with our partners from Baku. This was confirmed by the negotiations and we agreed to increase gas purchases in 2012,” said Alexey Miller.


Azerbaijan possesses up to 1.5 trillion cubic meters of explored gas reserves including the Shakh-Deniz field located in the Azerbaijani offshore sector of the Caspian Sea with possible gas reserves of up to 1.2 trillion cubic meters. Natural gas consumption in Azerbaijan is at some 10 billion cubic meters per year.

The State Oil Company of Azerbaijan Republic (SOCAR) is Azerbaijan’s largest state-owned petroleum company involved in oil, gas and gas condensate exploration, production, processing, transportation and marketing.

On October 14, 2009 Gazprom and SOCAR signed the purchase and sale contract for Azerbaijani natural gas. Starting from January 1, 2010 Azerbaijani gas has been supplied to Russia via the Shirvanovka gas metering station.

On September 3, 2010 Gazprom and SOCAR signed the addendum to the effective purchase and sale contract for the Azerbaijani natural gas, stipulating that the annual purchase volume would grow to 2 billion cubic meters starting from 2011 and to more than 2 billion cubic meters from 2012.


Source: Gazprom, January 24, 2010;