ECONOMIC INTELLIGENCE WEEKLY

Created: 8/5/2000

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Economic Intelligence Weekly

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Caspian Gas: Turkey Shifting Focus to Azerbaijan as Suppuerl

Presidents of Turkey and Azerbaijan have authorized negotiations on tbe sale of gas from the recently discovered Shah Deniz field, spurred on by Turkmen President Niyazov's failure to cornmit to the Traos-Caspian gas pipeline (TCP) project. Turkey is desperate for more gas and would bencfii from the quicker completion of the pipeline segment from Baku.

The President ofShah Deniz

Iran offered the same as Russia, end Niyazov broke off negotiations. I

Niyazov's replacement of Foreign Minister Shlknmuradov with First Deputy Minister Berdiyev last week is unlikely to affectaspian policy or pipeline strategy because Ntyazov retains ultimate dccisionnuikmg authority.

development was moving ahead but that the partners would not commit to the projectales agreement is signed.

Valeh Alesfcerov, Director offor tbe Azerbaijani stateSOCAR, predicted that Turkeytoillion cubic metersyear with subsequent annual deliveriesbem.

Niyazov

Turkish Supply Still Problematic

Tbe line from Baku could be completed byut Turkey would still have to turn to Iran and Russia if Azerbaijani production later this decade fails to meet projections.

Turkish officials remain committed to the TCP and say they want to Emit their gas dependence on Russia and Iran to the Blue Stream and tbe Iran-Turkey pipelines.

Capital and Bcchtel are frustratedare about lo

withdraw liom the consortium, ceding the lead rolehas

Azerbaijanompetitor in supplying Turkey with gas, and be continues to treat Russia's Blue Stream project as nonviable even though construction has bagun. I

The Iran-Turkey pipeline Is nearly complete, but startup Is not planned until August of next year.

the tup has msdc Moscow to Ashgabat's pricing terms.

resistant

Russia offered to buy anem this year andem per year foroears at the previously negotiated priceillion per bem. only half to be paid in cash. Turkmcnistati2 million.

5 August

Original document.

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