Gazprom and SOCAR sign Memorandum of Understanding
March 27, 2009 - The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Rovnag Abdullayev, President of the State Oil Company of Azerbaijan (SOCAR).
The parties confirmed their interest in developing mutually beneficial strategic partnership, highly appreciated the available potential for a massive long-term cooperation and signed a Memorandum of Understanding.
Pursuant to the Memorandum, an accord has been reached to launch the negotiations aimed at settling the terms of Azerbaijan's gas sales and purchase, with the first deliveries projected for January 2010 on DAF conditions - Azerbaijani frontier/Russia. The parties will also address the versions and economic viability of gas swap operations.
The Memorandum stipulates developing a cooperation program on experience exchange, holding of training courses, arranging of seminars and visits to production facilities by the experts of both parties for information sharing.
In the near future Gazprom and SOCAR will perform technical inspection of the gas pipeline system at the Baku - Novo-Filya section for its modernization. Azerbaijani gas will be supplied to Russia via this section.
Azerbaijan holds up to 1.5 trillion cubic meters of proven natural gas reserves.
Annual gas consumption in Azerbaijan accounts for 12-14 billion cubic meters.
Baku - Novo-Filya - is a section of Azerbaijan's gas transportation system running from Baku to the Russian border across the Caspian coast. The section is made of 1,220 mm pipes and has the length of around 200 km.
DAF - Delivered At Frontier.