News / Europe

Azerbaijan, Georgia, Romania Sign Gas Deal

Azerbaijan, Georgia and Romania have signed a deal to create a transit corridor for natural gas that will bypass Russia and run directly from the Caspian Sea to Europe.

Officials said Tuesday that under the deal, a liquified natural gas pipeline will link the Caspian to Georgia. The gas then will be carried by tankers across the Black Sea and into the rest of Europe via existing pipelines.

Azerbaijan's state energy firm SOCAR said in a statement that state-run energy corporations in each country will hold equal stakes in the estimated $5 billion venture.

The project is expected to supply up to eight billion cubic meters of gas a year.

Several European capitals have been seeking alternatives to Russian gas, in the aftermath of several recent pricing disputes between Russia and Ukraine that led Moscow to cut pipeline supplies bound for western Europe.

A spokesman for the Hungarian prime minister said Hungary had signed onto the deal in a separate agreement.

In January 2009, Russia cut gas flow through Ukraine to the West for nearly two weeks, before settling a dispute that had left large parts of Europe without adequate winter heating supplies.

Many Western governments, reeling from the shortages, labeled Moscow as an unreliable energy partner.

The new transit corridor is seen as a way of diversifying gas deliveries.

Some information for this report was provided by AFP and Reuters.

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