Wednesday, January 12, 2011

Azerbaijan signs natural gas contract with Iran

Azerbaijan has again demonstrated to Europe and the United States that it has customers for its natural resources even if the Southern Energy Corridor is never built. On January 12, Iranian Minister of Oil Seyed Massoud Mir-Kazemi (left) led an energy delegation to Baku. He was received by President Ilham Aliyev who stressed the development of bilateral relations between the two countries, and the great history of ties in the energy sector (
The delegation included members of the National Iranian Gas Export Company (NIGEC), who signed a long term contract with the State Oil Company of the Azerbaijan Republic (SOCAR) in which SOCAR agreed to provide Tehran with natural gas for five years. Deliveries in 2011 will begin with a billion cubic meters, but the volume will increase in the future as SOCAR reconstructs the pipeline and improves compressor stations along the line. The signators hope the volumes will triple with these upgrades. (
According to the Iranian oil minister, the agreement is a road map for future energy cooperation. He confirmed that the repairs envisioned in the contract are underway, and another contract was in the offing for the construction of gas storage facilities (
The new contract with Iran was signed on the eve of a visit to Azerbaijan by European Commission President Jose Manuel Barroso. The EU chief has said that during the visit he will make the case for the realization of the Southern Gas Corridor, and the signing of a "Joint Declaration on the Establishment of the Southern Corridor" with President Aliyev is scheduled for January 13 ( The signing of an agreement with Iran a day earlier is a shot across the Europeans' bow, reminding them that Europe needs Caspian energy more than Caspian countries need European markets.

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