Baku Signs 1-yr Purchase Contract with Gazprom
Russian giant Gazprom has started delivering gas to Azerbaijan’s state-run Socar, the latter announced November 22, the day after the two signed a sales and purchase contract for 1.6bn m³. Socar told NGW that that amount would be delivered by November 2018. The gas comes through the Haciqabul-Baku transmission system which has a capacity of 12mn m3/d (4.38bn m3/yr).
Gazprom Export boss Elena Burmistrova said: “We have a long history of partnership with Azerbaijan in the field of natural gas trading. It is encouraging to see this relationship flourish and move to the next level.”
Gas trade between the two countries started in October 2000 when Azerbaijan started gas imports from the privately-owned Russian company Itera, which is now part of Rosneft. Then Gazprom took over deliveries from 2004 to 2007 but then stopped as Azerbaijan started up the Shah Deniz gas field. From 2010 to 2015, Socar exported gas to Russia, 5.4bn m³ in all. Azerbaijani gas exports to Russia reached 1.37bn m3/yr in 2013, but plunged to 206mn m3/yr in 2014 and then stopped altogether.
Azerbaijan's privately-owned AzMeCo started importing 6mn m³/d from Gazprom's Swiss subsidiary in September 29, 2015, but stopped after two months, by which point Azmeco had bought a little more than 107mn m³.
Socar purchased the bankrupted AzMeCo methanol plant for $510mn last year, upgraded it and resumed production in April 2017, trading as the Socar Methanol Company.
Russia's latest contract comes as Azerbaijan is projected to increase gas production by 4.9% in 2018, after falling each year since 2015. Azerbaijan produced 21.09bn m³ gross gas in the first nine months of the year (down 5.3% year on year), of which after flaring or reinjection, 13.51bn m³ was available for sale, which was a decrease of 3.4%. However, the country exported 6.23bn m³ over that period, an increase of 7.7%.
Turkmenistan has been swapping 1.5bn m³/yr with Iran for Azerbaian since October 2016. Gazprom opened its office in Baku last month
Dalga Khatinoglu, Ilham Shaban