Azerbaijan, Greece sign direct gas supply deal

Azerbaijan and Greece signed a deal on Tuesday on direct gas supplies, bypassing Turkish intermediaries.
Azerbaijan — a potential key gas supplier of the European-backed Nabucco pipeline project — has made it a policy to diversify gas sales, to avoid dependence on any one intermediary such as Turkey or Russia.
The volume was not specified, but Azerbaijan said in February it planned to sell 0.7 bln cubic metres directly to Greece, which had been buying the same volume from Turkey since the end of 2008 as part of a re-export scheme.
"Azerbaijan is interested in boosting gas supplies to Greece and wants to use its transit possibilities in the future," Azeri President Ilham Aliyev said after talks with his Greek counterpart Karolos Papoulias in the Azeri capital, Baku.
The document was signed by Azeri state energy firm SOCAR and the Greek company DEPA.
"This document … will be a serious incentive for Azerbaijan's cooperation with other European countries, as Azerbaijan will be doing its best to ensure the energy security of Europe," Aliyev said.
It remains unclear when Azerbaijan will start direct supplies. Details of the memorandum were not disclosed.
Azerbaijan's gas output rose by 11.2% in 2010 year-on-year to 26.2 bcm from 23.6 bcm in 2009.
It plans to produce 28.0 bcm of gas this year, including 9.1 bcm at its major Shah Deniz field.
Shah Deniz, co-led by BP and Statoil, is estimated to contain 1.2 trln cubic metres of gas.
Production at the deposit began in 2006, while second phase production is expected to begin by late 2016 or early 2017.
Azerbaijan's total gas reserves are estimated at 3-5 trln cubic metres.
It sells gas to the domestic market, neighbouring Georgia and Turkey via the Baku-Tbilisi-Erzurum pipeline, as well as Russia.