BAKU, Azerbaijan, March 1. State Oil Company of Azerbaijan (SOCAR), Shah Deniz consortium have started negotiations with Türkiye's BOTAS to extend the agreement on gas supply to Türkiye via the Baku-Tbilisi-Erzurum (BTE) pipeline, as the existing four-year mid-term contract expires at the end of 2024, an informed source told Trend.
"Negotiations are underway, there's an understanding between the parties. Preliminarily, we are talking about volumes similar to the previous ones. As for the term of the new agreement, it is being clarified," the source informed.
Meanwhile, the long-term (15-year) contract with BOTAS for the purchase and sale of gas from Shah Deniz Stage-1 (this gas had been flowing to Turkey since spring 2007) through the new BTE pipeline, through which Turkey could annually receive up to 6.6 bcm of gas from this Azerbaijani field, expired on April 16, 2021.
The sides signed a new contract in the fall of 2021 for a term until the end of 2024.
The peak of supplies under this medium-term contract is 2023-2024 (at 3.5 bcm per year).
"The new negotiations discuss a volume of more than 2-3 bcm per year. There are no definite agreements yet," the source noted.
According to him, Azerbaijan is trying to stipulate flexible commercial terms (prices close to spot prices), while in the long-term (first, 15-year agreement) gas price under the BTE was tied to the oil basket.
Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas, of which more than 20 percent has been extracted to date.
The contract for the development of the Shah Deniz field was signed in Baku on June 4, 1996, and ratified by the Azerbaijani Parliament on October 17 of the same year.
The field is produced from the Alpha (Stage 1) and Bravo (Stage 2) platforms. Together these platforms currently produce 79 million cubic meters of gas per day.
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