AZERBAIJAN THREATENS TURKEY TO CUT GAS SUPPLIES

PanARMENIAN.Net
02.04.2009 13:21 GMT+04:00

/PanARMENIAN.Net/ Concerned that the Turkish government might open its
border with Armenia before reconciliation is reached, the Azerbaijani
government has signaled it might stop selling natural gas to Turkey.

Azerbaijani President Ilham Aliyev said that Baku would cut gas
supplies to Turkey if Ankara reaches an agreement with Yerevan before
substantial progress is underway on the Nagorno Karabakh issue,
the Hurriyet Daily News reports.

As a sign of how serious it is, Azerbaijan signed a memorandum of
understanding with Russia last week for long-term supply of gas at
market prices.

Ankara and Baku have been trying to reach an agreement over the
price of natural gas Turkey buys from Azerbaijan through the
Baku-Tbilisi-Erzurum pipeline. The agreement to buy natural gas
for $120 per 1,000 cubic meters for the duration of the first year
following the opening of the pipeline has long ended and the two
failed to reach an agreement as Azerbaijan wants to sell its gas at
international market prices, which is around $350 per 1,000 cubic
meters.

Russia, on the other hand, has been courting Azerbaijan to buy
its gas at international market prices in order to undermine the
Nabucco project, which aims to bring Central Asian gas to Europe via
Turkey. Gazprom and the State Oil Company of Azerbaijan last week
signed a memorandum of understanding for long-term supplies of Central
Asian gas to Russia at market prices, Web site Euractiv.com reported
yesterday. According to Gazprom's press release, the parties committed
to massive long-term cooperation after an agreement was reached March
27 to settle the terms of Azerbaijan's gas sales to Russia.

Pavel K. Baev, a senior researcher from the Oslo International
Research Institute, said the project could make Nabucco irrelevant as
Azerbaijan is seen as the most likely gas supplier for Nabucco. The
Turkish government is under pressure from the Obama administration to
finalize and announce the agreement with Yerevan. Turkey and Armenia
have agreed on most of the wording of a protocol for normalization but
there are still some points where the two need to agree. The Turkish
side wants to insert the issue of Nagorno Karabakh in the protocol,
but the Armenian side has not been compromising on the issue, the
report says.