Azerbaijan and Turkey have agreed on the price of Azerbaijani gas in the first stage of the Shah Deniz project, State Oil Company of the Azerbaijan Republic (SOCAR) head Rovnag Abdullayev said today.

"We have agreed on questions concerning the gas price in the first stage," he said. "The question the gas price in the second stage has not yet agreed upon. Therefore, a final decision on the whole package [of questions] has not yet accepted."

According to the company head, as Azerbaijan-Turkey relations in the gas sector are currently being discussed within a questions package, the coordination of a single question without the consent of the others means the absence of final agreement.

The package includes issues like the gas price in the first and the second stages of development of the Shah Deniz field, and transit conditions and the cost of transit.

Presently, Turkey receives the Azerbaijani gas at a price of $120 per 1000 cubic meters.

The contract for 'Purchase-Sale' concluded between the partners of Shah Deniz project and Turkey stipulates that the cost of Azerbaijani gas from this field can be reviewed in a year after supplies are launched, i.e. a new price will be introduced since April 15, 2008.

Under the current contract, Turkey must receive 6.6 billion cubic meters of gas from Shah Deniz in the first stage of the field's development.

Under the second phase, plans include producing roughly 20 billion cubic meters of gas a day.

Shah Deniz reserves are estimated at 1.2 trillion cubic meters.

The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.
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