"If Gazprom does not change the gas price, Azerbaijan will refuse to buy Russian gas," Rovnag Abdullayev, the president of SOCAR, responsible for production of oil and natural gas in Azerbaijan, said.
"Why does Russia sell gas to Ukraine at $130, to Armenia at $110, and we have to buy it at $235 per 1,000 cu m?" Abdullayev said.
Russia's energy giant Gazprom [RTS: GAZP] is considering the absence of response from Azerbaijan on the proposed amount of natural gas supplies in 2007 as a refusal to buy, a company official said earlier Tuesday.
"The Azerbaijani government met to discuss the issue yesterday, but we have received no reply," said Alexander Medvedev, the head of Gazprom's export arm, Gazexport. "We regard its silence as a refusal to buy Russian natural gas."
Gazprom proposed that Azerbaijan pay $235 per 1,000 cubic meters of natural gas in 2007 and asked the republic to specify gas volumes, Medvedev said.
Since last year, Gazprom has been pushing for European prices for the gas it sells to its ex-Soviet neighbors, which previously enjoyed preferential rates.
Azerbaijan produces some 4-5 billion cubic meters of gas compared with the country's requirements of 14 billion cubic meters a year. This year, the republic is importing Russian natural gas at $110 per 1,000 cubic meters.
Azerbaijani President Ilham Aliyev said December 23 that his country could refuse to buy Russian gas.
Earlier, Abdullayev said Gazprom wants to reduce gas exports to Azerbaijan by two thirds from 4.5 billion cu m this year to 1.5 billion cu m in 2007, and that Azerbaijan intends to use its domestic capabilities as well as natural gas from the Shah Deniz field in the Caspian Sea to make up for its demands.
