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SOCAR, Gazprom to start gas swaps soon

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socar-gazpromThe State Oil Company of Azerbaijan (SOCAR) and Russia’s Gazprom company will start implementing swap transactions on Russian gas supply to Azerbaijan soon, SOCAR President Rovnag Abdullayev told reporters Sept.17.

“Gazprom has an excess of natural gas and therefore we have decided to store these volumes in our gas storage facilities,” said Abdullayev.

“We have held such talks with Iran as well,” said SOCAR president. “For our part, we have expanded the capacity of our gas storage facilities and the supply of Russian gas will become a kind of pilot project for testing their capabilities.”

As a result, SOCAR and Gazprom agreed to switch to the temporary swap scheme, he said.

SOCAR president added that the supply of around 10 million cubic meters of Russian gas per day will start next month.

“In total, we are talking about supplying around 2 billion cubic meters of gas per year,” he said.

Rovnag Abdullayev noted that in the future, this gas will be used for supplying Russia’s southern regions.

“Thereby, we will check the peak capacity of our gas storage facilities in 2015 and 2016,” said SOCAR president. “We will start to ensure the gas supply to Russia’s North Caucasus region from 2017.”

Abdullayev said that the sides have already reached a preliminary agreement and an expert group, which is working on the technical details, has been created.

“The agreement will be signed in 10-15 days,” he added.

Earlier, Azerbaijan Methanol Company (AzMeCo) signed a contract on purchasing up to 2 billion cubic meters of gas per year from Russia’s Gazprom Export LLC.

The natural gas supply will ensure the guaranteed loading of 100 percent of facilities of AzMeCo methanol plant in Garadagh. Gas supplies to the methanol plant of AzMeCo company by Gazprom Export LLC will start Sept.20-21.

Earlier, Alexey Miller, head of Gazprom said that the company can supply several billion cubic meters of gas to Azerbaijan per year.

Currently, Gazprom has a contract on purchasing Azerbaijani gas. The document was signed Oct.14, 2009 with the possibility of extension. The contract between SOCAR and Russia’s Gazprom allows to suspend and resume gas supplies any time.

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