* Azerbaijan began importing from Iran last year
* Gas prices have doubled for many Azeris
* Industry sources report supply hitches
* Country not seen renegotiating export deals
By Nailia Bagirova and Margarita Antidze
BAKU/TBILISI, Feb 24 Ex-Soviet Azerbaijan is on
track to send gas to western Europe by the end of the decade,
but is having to import supplies to use at home, compounding
economic hardship that prompted protests last year.
The country contains one of the world's biggest gas fields,
Shah Deniz on the Caspian Sea, but it has presold the next stage
of output, due by 2020, to Greece, Italy, Turkey and other
states keen to reduce their dependence on Russian gas.
At the end of last year, as construction of the pipeline to
deliver the gas passed the halfway mark, Azerbaijan's state
energy company SOCAR said it had begun importing gas from Iran.
Two industry sources told Reuters the gas actually came from
Turkmenistan, another ex-Soviet republic with prices more
affordable for the Azeris, but that supplies had stalled due to
a pricing dispute between Iran and Turkmenistan.
Pricing had also stalled talks on possible imports of
Russian gas to Azerbaijan to make up the shortfall, they said.
Officials have expressed optimism that projected increases
in production from other Azeri gas fields will fill the gap in
due course, citing Umid, Bulla Deniz and Absheron, which will be
developed under a deal with Total signed in November.
In the meantime, the issue poses a dilemma for Azerbaijan's
longtime president Ilham Aliyev, who faces a sharp slide in the
manat currency due to the slump in global oil prices and a
balancing act between Russia and the West.
In January SOCAR announced big gas price hikes for Azeris
already paying more for staples like bread because wheat and
many other food items are imported. One of the company's vice
presidents, Suleiman Gasymov, said they may not be the last.
"If the manat were to continue falling, SOCAR would ...
propose revising the price of gas," he said.
Matanat Kasumova, who works in a shop in Baku, said she had
cut back on heating after the bill for her family doubled to 100
manats a month ($56), a fifth of an average salary.
Some Azeris blamed the government, rare in a country where
complaints are normally kept among friends. "I don't know how I
will pay my bills. Tariffs have been increased, prices rise and
the government doesn't do anything to help us," said Fatakh, a
taxi driver in the capital who declined to give his last name.
Aliyev, who succeeded his father, Heydar, as president in
2003, tightened his grip on power this week by appointing his
wife, Mehriban, as first vice president.
Early last year, protests broke out in some Azeri towns
against rising prices and unemployment. In some
places, there were violent clashes with police, witnesses told
Reuters. Police quickly restored order, detaining dozens of
"UPSET BUT QUIET"
Azerbaijan's manat currency touched its lowest ever
of 1.92 per U.S. dollar on Feb 1, half of its value at the end
of 2015, and annual inflation tripled to 12 percent last year.
There is no outward sign of unrest over the gas price, but
Vagif Asadov, a 45-year-old resident of Baku, said discontent
was widespread. "Everyone is upset, but quiet," he said.
The country consumes about 12 billion cubic metres (bcm) of
gas each year and had a shortage of around 1.4 billion cubic
metres in 2016, data from the state statistics service shows.
Khoshbakht Usifzade, another SOCAR vice president, told
Reuters in December Baku had begun buying around 2-4 million
cubic metres of gas a day from Iran, totalling 286 million cubic
metres last year. He gave no further details.
It has moved some energy facilities to fuel oil from gas and
a source at SOCAR said it might import more than last year's
150,000 tonnes of fuel oil this year and already had contracts.
Officials and experts declined to predict whether the
country would face the same gas shortfall this year.
Almost all the associated gas from Azeri-Chirag-Guneshli,
the major oilfield operated by an international consortium led
by BP, was reinjected to support declining oil production
in 2016, SOCAR officials said.
The second stage of Shah Deniz is set to produce 16 bcm per
year from 2020 but Ilham Shaban, an independent energy analyst,
said there was "no chance" Baku would try to renegotiate the
deal under which it was presold.
He saw the situation easing in 2018 with less gas used to
support declining oil output and the reopening of a platform at
Guneshli closed by an accident last year.
(writing by Margarita Antidze; editing by Katya Golubkova and