Azerbaijani President Heydar Aliyev said that his country would look to export natural gas south to Iran if a contract with Turkey is not forthcoming, official newspapers reported on Thursday.
Meeting with Turkish Deputy Energy Minister Yurdakul Yigitguden, Aliyev said that the former Soviet state could send gas from its Shah Deniz offshore field to other markets if talks with Ankara continued to drag on.
"Iran wants to buy gas from us in large quantities," Aliyev said, as quoted in the official Russian-language daily Baku Worker. "If this question (over gas deliveries) drags on, we will have to conduct negotiations with them."
The plan will most likely raise objections in the United States, however, which is staunchly opposed to countries of the region selling to or transporting large volumes of hydrocarbons through the Islamic republic.
Azeri officials say that Shah Deniz, which is being developed by a consortium led by British oil giant BP, could hold up to one trillion cubic meters of gas.
Gas projects however require that a supply contract be in place before development begins. Azerbaijan is also involved in a plan to build a two billion-dollar, 2,000-kilometer (1,250 mile) pipeline across the Caspian and the Caucasus to transport Turkmen gas to the Turkish market.
The project has reached an impasse, however, halted over Turkmen objections to financing arrangements. Baku and Ashgabat have also been unable to agree on how to divide the pipeline's capacity.
"If the trans-Caspian pipeline doesn't work out, then Azerbaijan, Georgia and Turkey will do something directly," said Aliyev. "If something blocks this option, then we have the chance to export to the south."
Industry insiders say that Ankara is delaying an Azeri gas supply contract until an oil pipeline from Baku to the Turkish Mediterranean port of Ceyhan is realized. The planned oil conduit has also encountered financing difficulties.
The two countries have been unable to reach agreement for more than one year, after BP announced the Shah Deniz discovery in summer, 1999. Azeri officials nevertheless say they expect documents will be signed in Ankara in the next few days.
Azerbaijan has faced a number of disappointing results in its offshore oil projects and is looking increasingly to its potentially huge gas reserves to guarantee the country's economic future.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)
