BAKU, July 3 (RIA Novosti) - Gazprom and Azerbaijan have agreed to start talks on Azerbaijani natural gas sales to the Russian energy giant, the company's chief executive said Thursday.
"Azerbaijan could become one of the countries selling natural gas to Gazprom, even though the country bought gas until recently," Gazprom CEO Alexei Miller said, adding that the company was seeking to buy the largest possible volumes of gas at market prices.
Gazprom proposed buying gas from the ex-Soviet state in June. The company has forecasted that the average European price for gas could hit $400 per 1,000 cubic meters by the end of 2008.
Miller said Thursday the forecast had been raised. "By the end of 2008, gas in Europe will cost $500 per 1,000 cu m," he said.
He added that should oil prices go past $250 per barrel, the natural gas price would exceed $1,000 per 1,000 cu m.
He said such high prices would not be an unnatural phenomenon for the market, as some individual Gazprom contracts had at certain times already exceeded the figure.
Rovnag Abdullayev, president of the State Oil Company of Azerbaijan, said earlier that the South Caucasus republic was studying Gazprom's offer to buy Azerbaijani gas at market prices along with proposals to supply natural gas for the Nabucco and Trans-Adriatic gas pipeline projects.
Azerbaijan is considered as a potential natural gas supplier for the Western-backed Nabucco project designed to bypass Russia and pump up to 30 billion cubic meters of natural gas annually from Central Asia to Europe via Azerbaijan, Turkey, Bulgaria, Romania, Hungary and Austria.
The Trans-Adriatic project is for a natural gas pipeline from the Caspian Sea to Italy through Greece and Albania and under the Adriatic Sea. The Swiss firm EGL-AXPO, the project's operator, plans to involve Azerbaijan as a natural gas supplier for the pipeline.
Azerbaijan's natural gas reserves are estimated at 1.5 trillion cubic meters.
Azerbaijan is developing its giant Shah Deniz field, with gas reserves of over 1 trillion cubic meters, under a production-sharing agreement signed in 1996. Seven companies, including BP, Norway's Statoil, France's Total and the State Oil Company of Azerbaijan are involved in the project.
The Shah Deniz field is expected to yield 8 billion cubic meters of natural gas this year.
In March, the gas companies of Kazakhstan, Uzbekistan and Turkmenistan said they will sell gas at European prices from 2009.
