for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Azerbaijan has signed new gas deal with Turkey, energy minister says

MOSCOW, Oct 14 (Reuters) - Azerbaijan has signed a new deal with Turkey to supply gas from its giant offshore Shah Deniz I field, Azerbaijan’s energy minister Parviz Shahbazov told Reuters on Thursday.

Azerbaijan halted gas supplies from Shah Deniz I to Turkey in April after the contract expired.

Shahbazov said Shah Deniz I will supply 2.5 billion cubic metres (bcm) to Turkey next year when Azerbaijan’s total gas production is seen increasing to 43 bcm. It will supply 3.5 bcm in 2023, the minister said, without providing further details.

“We will be increasing gas supplies (to Turkey) from Shah Deniz I in addition to Shah Deniz II,” he said on the sidelines of an energy conference in Moscow.

Turkey’s record demand for natural gas this year is forcing it to step up purchases on a surging spot market as it scrambles to renew long-term contracts expiring this winter.

Turkey had four long-term import contracts in total expiring this year totalling 16 bcm of annual supply.

Two industry sources told Reuters earlier this week that Turkey has renewed one of them, with Azerbaijan, agreeing a three-year contract to import up to 6 bcm per year, following the expiry of a 15-year contract for 6.6 bcm.

Supplies from Shah Deniz II in the Caspian Sea, which is due to supply Turkey with 6 bcm per year, have not been interrupted.

BP operates Shah Deniz on behalf of its partners in the Shah Deniz Production Sharing Agreement (PSA). (Reporting by Vladimir Soldatkin and Olesya Astakhova in Moscow; additional reporting by Nailia Bagirova in Baku; editing by Jason Neely)

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up