Turkey and Russia’s intention to buy Azeri gas

Turkey seems to be concerned by Russia’s proposal to buy all Azeri natural gas and pay the record price of USD 350 per 1000 cubic metres for it. This is a much higher sum than Moscow pays Turkmenistan and Uzbekistan, who receive USD 300. Presumably Russia is ready to pay this price to frustrate the NABUCCO project, which is designed to provide Europe with natural gas by bypassing Russia, and for which Azerbaijan will seemingly be the major provider.

Turkey buys Azeri gas for USD 120. For nearly a year negotiations on new tariffs have been underway between Turkey and Azerbaijan. These negotiations are being held against the background of the possible opening of the Armenian-Turkish border and the Karabakh conflict issue, to which is now added this ‘strange’ offer from Russia’s Gazprom which has challenged the Turkish side by quoting such a high price.

A pilot agreement on gas supply between Russia and Azerbaijan was signed during Medvedev’s visit to Baku on June 29, something which caused the utmost concern in Turkey. On July 1 the Turkish Minister of Foreign Affairs visited Moscow, presumably to clarify the situation.

Azeri Energy Minister Natik Aliev has stated that the Russian-Azeri memorandum does not concern the Shah Deniz 2 gas field. Therefore for the time being there is not much threat to Turkish interests in Azerbaijan, at least so far.