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Tuesday, November 07, 2006

Azerbaijan leader to visit Russia Nov. 8-10 ahead of gas talks

AzerbaijanrussiaMOSCOW, November 7 (RIA Novosti) - Azerbaijan's president will arrive in Moscow Wednesday for a three-day visit ahead of negotiations on Russian natural gas deliveries for 2007, the presidential press service said. The next round of talks between Azerbaijan and Russian gas monopoly Gazprom's export arm on the volume and price for Russian gas deliveries to the Caspian country in 2007 is scheduled for November. "At the invitation of the Russian president, Azerbaijan's President Ilham Aliyev will pay a working visit to Russia November 8-10," Aliyev's press service said. Russia covers one-third of Azerbaijan's gas needs, but the Caucasus neighbor is currently increasing its domestic gas production and seeking to diversify gas imports, including through deliveries from Iran. Since last year, Russian energy giant Gazprom has been pushing for European prices for the gas it sells to its ex-Soviet neighbors, which previously enjoyed preferential rates. But Azerbaijan's energy minister said October 12 that his country might stop importing Russian natural gas in 2007 and seek alternatives if the prices offered at upcoming talks are unacceptably high. "If the price for natural gas is too high, Azerbaijan will refuse to buy it [from Russia]," Natik Aliyev said, adding that his country has many alternative sources. Under an agreement signed in December 2003, Gazprom is to supply Azerbaijan with 4.5-5.5 billion cubic meters of natural gas annually until the end of 2008. In 2006, Azerbaijan will receive 4.5 billion cu m of gas at a price of $110 per 1,000 cu m. Aliyev said hydrocarbon-rich Azerbaijan could import gas from Iran and also increase its domestic production significantly once its Shakh-Deniz field in the Caspian Sea, with estimated reserves of around 1,000 billion cu m, comes on stream in December. Azerbaijan's annual domestic gas consumption totals 15-16 billion cu m. The country currently produces around 6.5 billion cu m of natural gas per year. Iran has proven natural gas reserves of around 28 trillion cu m, the world's second-largest reserves after Russia. In 2005, gas production in the country totaled 86.6 billion cu m.

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