News / Economy

Azerbaijan Signs New Gas Deals With Europe, Snubs Russia

Rovnag Abdullayev (L), the president of Azerbaijan's 'Shah Deniz,' shakes hands with Gianfilippo Mancini, director of the Market Division of the Enel Group, Italy's national electric company, during a signing ceremony in Baku September 19, 2013.
Rovnag Abdullayev (L), the president of Azerbaijan's 'Shah Deniz,' shakes hands with Gianfilippo Mancini, director of the Market Division of the Enel Group, Italy's national electric company, during a signing ceremony in Baku September 19, 2013.
Reuters
Azerbaijan signed contracts on Thursday to supply European buyers with gas, offering an alternative supply source to Russia towards the end of the decade.

Moscow has increased its diplomatic efforts to bring oil- and gas-rich Azerbaijan closer to its orbit as Russian President Vladimir Putin has been keen to restore influence over former Soviet republics.

However, his trip to Azerbaijan last month yielded few results, dashing Moscow's hopes of challenging the dominance of Western energy giants there.

Earlier this year, Azeri state oil company SOCAR and partners, including BP and Statoil, selected the Trans Adriatic Pipeline (TAP) for potential gas deliveries to Europe, following more than a decade of planning, dealing a blow to Russia's aspiration for tighter control over gas routes.

SOCAR said on Thursday that buyers of Azeri gas from its Shah Deniz II project are Shell, Bulgargas, Gas Natural Fenosa, Greek DEPA, Germany's E.ON, French GDF Suez, Italian regional utility Hera Trading, Swiss AXPO and Italian Enel.

‘Groundbreaking’ move

“It is a groundbreaking contract as it secures supplies to Europe from a new supply region for decades at conditions reflecting European gas markets,” Christopher Delbruck, the newly appointed CEO of E.ON Global Commodities SE, said in a statement.

He added that E.ON's contract with SOCAR spans 25 years during which the company will get 40 billion cubic meters (bcm) of gas.

European buyers have struggled to find alternatives to Russia's gas producer Gazprom, whose contracts link prices to oil, generally making it expensive compared to the spot market.

Gazprom covers a quarter of Europe's gas needs with over 150 bcm of its exports a year. In response to Europe's quest for Caspian supply, Gazprom proposed its $39 billion South Stream project which would pipe gas to northeast Italy through the Black Sea starting from the end of 2015

Italy to get lion’s share

Shah Deniz is expected from around 2019 to feed 16 bcm of gas per year to Europe, with 10 bcm earmarked for Europe and six bcm for Turkey.

Half of the gas is destined for Italy, a SOCAR official said.

“Around eight billion cubic meters of gas will be shipped to the Italian market, where European buyers will be getting it for their facilities in the country [Italy],” Elshad Nasirov, SOCAR's vice president, told reporters.

Two years ago, the consortium expected around 40 bcm per year of demand for its gas, but more realistic buyer demands had reduced the figure, BP's Vice President of Shah Deniz Development, Al Cook, told Reuters in March.

SOCAR will act as an operator of sales from Shah Deniz II. Statoil is a sale operator from Shah Deniz I.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.