Bulgaria gas deal turns Azerbaijan into EU energy partner (Updated)
Azerbaijan has signed an agreement to export gas to
Bulgaria which will result in the resource-rich South Caucasus
republic being recognized as a European Union energy partner.
The two countries signed the two documents on energy cooperation during Azerbaijani President Ilham Aliyev`s visit to Sofia on Friday.
The documents included a memorandum between Azerbaijan`s Ministry of Industry and Energy and Bulgaria`s Ministry of Economy and Energy. Also signed was a Memorandum of Understanding on transporting natural gas between Azerbaijan`s state energy firm SOCAR and Bulgaria`s state-owned gas operator Bulgartransgaz, a subsidiary of Bulgargaz.
Under the cooperation memo signed by the two countries` energy ministries, at least 1 billion cubic meters of Azerbaijani gas will be annually supplied to Bulgaria beginning in 2011-2012, allowing the Eastern European country to boost its energy security and diversify hydrocarbon supply routes, Bulgarian media reports.
Further, according to the agreements, SOCAR and Bulgartransgaz are to set up a joint venture. The company will explore the possible delivery of gas from Azerbaijan to Bulgaria, including both finding supplies for the quota that Bulgaria will be entitled to receive through the Nabucco gas transit pipeline and the transit of Azerbaijan`s compressed gas by tankers through the Black Sea.
If the project is created, Bulgaria would not have to build a liquefied natural gas terminal. Following the Russia-Ukraine gas crisis earlier this year, the Bulgarian government considered pushing for building such a terminal in Greece or Turkey in a bid to diversify the country`s gas supplies.
A gas dispute between Russia and transit country Ukraine in January cut off supplies to Europe, temporarily leaving households without heat in the winter and forcing factories to close.
Bulgaria, the poorest EU nation and a number of other ex-communist East European states, are almost totally dependent upon Russian gas and have no access to alternative import routes.
Bulgarian President Georgi Parvanov told a joint news conference following the signing that the agreements signed with Baku could, in the future, become part of the Nabucco pipeline project which seeks to pump gas from the Caspian and Central Asia regions to energy-thirsty European markets. But Parvanov could not be specific about when the Western-backed project would be launched, saying a number of outstanding issues must first be resolved.
``These are, primarily, seeking sources of energy resources and issues pertaining to transit and funding. Azerbaijan reiterated its backing of Nabucco in Prague in May, while transit and funding issues have yet to find their solution.``
The 3,300-kilometer Nabucco pipeline, which will run from eastern Turkey to the Austrian capital Vienna, is expected to come online in 2014. Azerbaijan is among the key suppliers for Nabucco which, when fully operational, will carry 31 billion cubic meters of gas annually.
``By delivering gas to Bulgaria, Azerbaijan is essentially turning into the EU`s energy partner,`` President Aliyev said.
He recalled that the country`s strategic energy partnership with the bloc began with the signing of a memorandum in 2006. ``The documents signed today will provide a basis for further development of our relations,`` Aliyev said.
Aliyev noted that the documents signed by Azerbaijan and Bulgaria would assist in expanding cooperation in the gas sector and other countries would join this partnership in the future.
``Azerbaijan has large supplies of gas...and wants to export the gas through better, secure routes,`` Aliyev said at the signing ceremony. ``We are looking for more partners and we hope Bulgaria will help us.``
Despite its huge natural gas reserves, estimated at 2 trillion cubic meters, Azerbaijan is expected to increase production to provide much of the gas needed to fuel the Nabucco pipeline only during the second phase of operating the Shahdaniz gas field in the Caspian Sea. According to experts, this is expected to provide some 8-10bn cubic meters of additional gas per year.
The Black Sea and Caspian Sea regions bear strategic importance for the 27-member EU and remain a priority area in its external relations. Located in these regions are such key partners as Russia, Turkey and the countries of the so-called Eastern dimension of the European Neighborhood Policy (ENP). The regions are a core element in the EU`s energy policy and an important transport corridor between Europe and Asia. From this viewpoint, Azerbaijan is interested in cooperating on supplying oil and gas to European markets with Bulgaria, a key hub located at the crossroads of pivotal energy routes.
Of note, Bulgarian President Parvanov paid a visit to Baku early this year. This was his third visit to Azerbaijan as president, following an official visit in 2004 and a working visit in March 2008. During the last meeting of Presidents Aliyev and Parvanov in Baku, start-up of the Nabuccо project was discussed. At that time, Parvanov told a news conference, ``Bulgaria has been instructed to step up the Nabucco project on behalf of the EU.`` The Bulgarian leader also said his country was ready to purchase 1 billion cubic meters of Azerbaijani gas annually to be delivered to Turkey through the Baku-Tbilisi-Erzurum pipeline.
Azerbaijan, however, said last month it would consider alternative routes to Europe because Turkey had offered unacceptable transit terms for gas from the Shahdaniz field for gas produced during the next stage of production between 2013 and 2016.
Baku and Ankara have not yet reached a transit deal.
According to the Bulgarian government, Azerbaijan`s gas could be supplied through existing pipelines crossing Georgia and Turkey; through pipelines under construction that would link Bulgaria with Turkey and Greece; through the Turkey- Greece-Italy (TGI) pipeline; and via Nabucco in the future.
In July, Sofia signed an agreement with Greek natural gas monopoly DEPA and Italy`s Edison SpA to link its gas network to the Greek-Italian stretch of the ITGI pipeline.
The two countries signed the two documents on energy cooperation during Azerbaijani President Ilham Aliyev`s visit to Sofia on Friday.
The documents included a memorandum between Azerbaijan`s Ministry of Industry and Energy and Bulgaria`s Ministry of Economy and Energy. Also signed was a Memorandum of Understanding on transporting natural gas between Azerbaijan`s state energy firm SOCAR and Bulgaria`s state-owned gas operator Bulgartransgaz, a subsidiary of Bulgargaz.
Under the cooperation memo signed by the two countries` energy ministries, at least 1 billion cubic meters of Azerbaijani gas will be annually supplied to Bulgaria beginning in 2011-2012, allowing the Eastern European country to boost its energy security and diversify hydrocarbon supply routes, Bulgarian media reports.
Further, according to the agreements, SOCAR and Bulgartransgaz are to set up a joint venture. The company will explore the possible delivery of gas from Azerbaijan to Bulgaria, including both finding supplies for the quota that Bulgaria will be entitled to receive through the Nabucco gas transit pipeline and the transit of Azerbaijan`s compressed gas by tankers through the Black Sea.
If the project is created, Bulgaria would not have to build a liquefied natural gas terminal. Following the Russia-Ukraine gas crisis earlier this year, the Bulgarian government considered pushing for building such a terminal in Greece or Turkey in a bid to diversify the country`s gas supplies.
A gas dispute between Russia and transit country Ukraine in January cut off supplies to Europe, temporarily leaving households without heat in the winter and forcing factories to close.
Bulgaria, the poorest EU nation and a number of other ex-communist East European states, are almost totally dependent upon Russian gas and have no access to alternative import routes.
Bulgarian President Georgi Parvanov told a joint news conference following the signing that the agreements signed with Baku could, in the future, become part of the Nabucco pipeline project which seeks to pump gas from the Caspian and Central Asia regions to energy-thirsty European markets. But Parvanov could not be specific about when the Western-backed project would be launched, saying a number of outstanding issues must first be resolved.
``These are, primarily, seeking sources of energy resources and issues pertaining to transit and funding. Azerbaijan reiterated its backing of Nabucco in Prague in May, while transit and funding issues have yet to find their solution.``
The 3,300-kilometer Nabucco pipeline, which will run from eastern Turkey to the Austrian capital Vienna, is expected to come online in 2014. Azerbaijan is among the key suppliers for Nabucco which, when fully operational, will carry 31 billion cubic meters of gas annually.
``By delivering gas to Bulgaria, Azerbaijan is essentially turning into the EU`s energy partner,`` President Aliyev said.
He recalled that the country`s strategic energy partnership with the bloc began with the signing of a memorandum in 2006. ``The documents signed today will provide a basis for further development of our relations,`` Aliyev said.
Aliyev noted that the documents signed by Azerbaijan and Bulgaria would assist in expanding cooperation in the gas sector and other countries would join this partnership in the future.
``Azerbaijan has large supplies of gas...and wants to export the gas through better, secure routes,`` Aliyev said at the signing ceremony. ``We are looking for more partners and we hope Bulgaria will help us.``
Despite its huge natural gas reserves, estimated at 2 trillion cubic meters, Azerbaijan is expected to increase production to provide much of the gas needed to fuel the Nabucco pipeline only during the second phase of operating the Shahdaniz gas field in the Caspian Sea. According to experts, this is expected to provide some 8-10bn cubic meters of additional gas per year.
The Black Sea and Caspian Sea regions bear strategic importance for the 27-member EU and remain a priority area in its external relations. Located in these regions are such key partners as Russia, Turkey and the countries of the so-called Eastern dimension of the European Neighborhood Policy (ENP). The regions are a core element in the EU`s energy policy and an important transport corridor between Europe and Asia. From this viewpoint, Azerbaijan is interested in cooperating on supplying oil and gas to European markets with Bulgaria, a key hub located at the crossroads of pivotal energy routes.
Of note, Bulgarian President Parvanov paid a visit to Baku early this year. This was his third visit to Azerbaijan as president, following an official visit in 2004 and a working visit in March 2008. During the last meeting of Presidents Aliyev and Parvanov in Baku, start-up of the Nabuccо project was discussed. At that time, Parvanov told a news conference, ``Bulgaria has been instructed to step up the Nabucco project on behalf of the EU.`` The Bulgarian leader also said his country was ready to purchase 1 billion cubic meters of Azerbaijani gas annually to be delivered to Turkey through the Baku-Tbilisi-Erzurum pipeline.
Azerbaijan, however, said last month it would consider alternative routes to Europe because Turkey had offered unacceptable transit terms for gas from the Shahdaniz field for gas produced during the next stage of production between 2013 and 2016.
Baku and Ankara have not yet reached a transit deal.
According to the Bulgarian government, Azerbaijan`s gas could be supplied through existing pipelines crossing Georgia and Turkey; through pipelines under construction that would link Bulgaria with Turkey and Greece; through the Turkey- Greece-Italy (TGI) pipeline; and via Nabucco in the future.
In July, Sofia signed an agreement with Greek natural gas monopoly DEPA and Italy`s Edison SpA to link its gas network to the Greek-Italian stretch of the ITGI pipeline.