The source in Azerbaijan's government said energy-rich Azerbaijan would refine the crude, destined for Russia's Novorossiisk, to produce fuel for thermo-power plants generating electricity.
The State Oil Company of Azerbaijan, however, said it had no information about suspended supplies along the Baku-Novorossiisk pipeline from January 1.
Tamam Bayatly, chief spokesman for the BP-Azerbaijan company, said Azerbaijan's International Operating Company, which is operated by BP-Azerbaijan and where the State Oil Company is a shareholder, had been pumping crude along the pipeline from the beginning of the year as scheduled proceeding from monthly applications.
Azerbaijan's President Ilham Aliyev said late last year that his country was considering reducing oil exports via the pipeline to Russia due to higher prices for Russian natural gas.
Russia is pushing for a gas price of $230 per 1,000 cubic meters for Azerbaijan, which paid $110 last year. Azerbaijani authorities said the price was too high.
Aliyev said Azerbaijan had no other way to ensure its electricity security but to reduce the volume of oil exported via the Baku-Novorossiisk pipeline to Russia.
