Turkish, Azeri Leaders Agree On Gas Contract

August 2010 Vol. 237 No. 8

Turkish President Abdullah Gul and Azerbaijani President Ilham Aliyev signed an agreement covering terms for the supply of gas from Azerbaijan to Turkey and the transit of Azeri gas via Turkey to Europe, potentially paving the way for the first gas purchase and supply agreements for Shah Deniz phase-2 gas production.

The agreement is a much-needed shot in the arm for a variety of “southern corridor” gas infrastructure projects, which have been hampered over the impasse between Turkey and Azerbaijan. The deal should pave the way for the launch of the phase-2 development of Azerbaijan’s Shah Deniz gas field, which is expected to provide gas supplies for export via Turkey to Europe, as well as underpin construction on a variety of new infrastructure projects designed to deliver this gas.