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Saturday, 23 January 2010

AZERBAIJAN: BAKU SET TO QUADRUPLE GAS EXPORTS TO RUSSIA BY 2011



Having significantly lowered natural gas imports from Turkmenistan, Russia’s state-controlled energy conglomerate Gazprom is turning to Azerbaijan to make up some of the difference.

Gazprom and its Azerbaijani counterpart SOCAR announced on January 21 that the Russian conglomerate would significantly increase gas purchases from Azerbaijan over the next two years. An agreement signed last year, indicated that Gazprom would buy 500 million cubic meters (mcm) of gas from SOCAR in 2010. But following a meeting in Moscow between Gazprom CEO Alexei Miller and his SOCAR counterpart Rovnag Abdullayev, the Russian firm announced that it would obtain 1 billion cubic meters (bcm) of SOCAR gas this year and 2 bcm in 2011.

Following the meeting with Abdullayev, Miller reiterated a pledge to purchase "as much gas as SOCAR can supply." Experts widely believe Gazprom’s desire to lock up SOCAR’s gas production is motivated by a desire to prevent the construction of new energy export routes that would circumvent Russia, and, therefore, break the Kremlin’s stranglehold on the European market.