Azeri natural gas issues

Azeri independent analyst Togrul Sofiev has commented on the agreement achieved between Gazprom and SOCAR under which Azerbaijan will supply Russia with 2 billion cubic metres of natural gas annually from 2011.

As there is no known fixed price for the Azeri gas being sold to Turkey the Azeri state oil company SOCAR is diversifying its supply portfolio. Russia benefits from this as it is beneficial for it to transport natural gas to the Russian North Caucasus from Azerbaijan rather than Siberia or Central Asia. Azerbaijan is likewise demonstrating to the West, and Turkey, that it has other places it can sell its gas. Sofiev however thinks that Azerbaijan is gambling, as currently there are signs that there is a shortage of gas supply inside the country itself and a deficit of electricity in regions of Azerbaijan which receive electricity from gas.

There is also a shortage of gas in some newly constructed districts in Baku. Under these circumstances the Azeri analyst is curious as to why Baku is taking on extra commitments to supply Iran and Georgia with natural gas.