Turkey, who has sped up efforts to secure additional gas supplies as its contracts for western corridor natural gas is due to expire in 2010, has still not yet reached agreement with Azerbaijan over the price and volume of gas delivered by the Baku-Tbilisi-Erzurum (BTE), the Turkish Daily News (TDN) reported.
Negotiations are continuing between Turkey and Azerbaijan, TDN said.
The BTE pipeline, also known as the Shah Deniz pipeline, pumping natural gas from the Azerbaijani sector of the Caspian Sea to Turkey since 2007, stands as one of the options for supplying gas to Turkey.
"Under the current circumstances the Azerbaijanis are not willing to supply Turkey with additional gas from the BTE pipeline because of the low prices being offered by Ankara," TDN quoted Mete Goknel, a senior energy analyst at the Center for Eurasian Strategic Studies, as saying.
If Azerbaijan does agree to provide Turkey with additional gas from the BTE in return for lower prices, Baku would have to turn to more expensive Russian gas to meet its increasing domestic energy needs, which was not a preferable option, he said.
Turkey, on the other hand, argues the price of BTE gas should be lower because the natural gas is directly transferred to Turkey after passing through a single territory, namely Georgia.
Goknel said British Petroleum (BP), the technical operator of the BTE pipeline, also objected to the current prices offered by Turkey and were pressing Azerbaijan to keep them higher.
Negotiations between Turkey and Azerbaijan are still under way. In the run-up to the presidential election in Azerbaijan set for next month, the slowly progressing decision-making mechanism on both sides is blocking a swift resolution, but hopes are high for a final settlement, TDN also said.
The BTE route passes through the territories of Turkey, Azerbaijan and Georgia and aims to transport and sell Azerbaijan's natural gas to Europe. The gas flow from the Caspian Sea to the West will be sustained with the extension of the pipeline to Italy by 2011, a project supported by the United States. The BTE is already linked with the Turkey-Greece inter-connector as a first step to provide Europe with natural gas.
News reports recently revealed that Greece had agreed with Azerbaijan to directly transfer the BTE gas to Europe and analysts said Turkey could only be confined to a transit fee at that time. Turkey has the right to an annual supply of 6.6 billion cubic meters of natural gas from the BTE route.
