Azerbaijan and Turkey Haggle over Gas Price

They may be cultural cousins and strategic allies, but when it comes to energy exports, it's strictly business between Turkey and Azerbaijan. The two countries continue to bicker over the price and volume of natural gas to be transported by the Baku-Tbilisi-Erzurum pipeline in 2010.

The English-language daily Turkish Daily News reports that Azerbaijan is dissatisfied with the price that Turkey wants to pay for gas deliveries. Details, such as the exact price and volume under discussion, have not been made public. News of the difficulty in the Turkish-Azerbaijani talks comes amid a push by the Russian state-controlled conglomerate Gazprom to secure a major increase in the amount of gas that it imports from Azerbaijan. The Russian company has reportedly offered to pay roughly $300 per thousand cubic meters of Azerbaijani gas, according to informed sources.

In comments broadcast September 22 by the ANS television channel in Baku, Energy Minister Natik Aliyev revealed that Gazprom had made "attractive offers." He went on to indicate Baku intended to keeps its options open in response to changing global circumstances. "Due to events happing in the world today, we keep a very flexible policy in regards to security, reliability of energy corridors. Azerbaijan has many options," Aliyev said.

"All offers must be considered to ensure that not only Azerbaijan's economic, but also political interests are satisfied," Aliyev continued

The Baku-Tbilisi-Erzurum (BTE) route is a key part of a nascent Caspian Basin energy network that operates beyond Russian control. Despite the snag concerning BTE, Turkey and Azerbaijan continue to talk about collaborative ventures. On September 9, for example, Turkish and Azerbaijani confirmed their mutual intention to move ahead with the long-planned Nabucco pipeline project. [For background see the Eurasia Insight archive].