* Agreement opens way for Azeri exports to Europe
* Nabucco one step closer to securing gas
* Azerbaijan says plans to export 10 bcm gas to Europe
(Releads, adds details)
By Simon Cameron-Moore and Evrim Ergin
ISTANBUL, June 7 Turkey and Azerbaijan signed on
Monday a memorandum of understanding on natural gas, opening the
way for Azeri gas exports to Europe and putting the EU-backed
Nabucco pipeline one step closer to securing supplies.
The deal also gives Turkey the right to re-export natural
gas from the second phase of production at Azerbaijan's offshore
Shah Deniz gas field, boosting the EU candidate's role as an
energy hub for European energy supplies.
Socar President Rovnag Abdullayev said Azerbaijan planned to
send 10 billion cubic metres of gas from Shah Deniz II to
"This opens the way for the securing of supplies for
projects like Nabucco, ITGI and TAP," said Turkish Energy
Minister Taner Yildiz.
Like the 7.9 billion euro ($9.43 billion) Nabucco, pipelines
like the Italy-Turkey-Greece Interconnector (ITGI) and the
Trans-Adriatic Pipeline (TAP) also aim to bring Azeri gas into
Turkey and Azerbaijan have been negotiating since 2008 over
the gas agreement, delaying the start date for the Shah Deniz
second phase and boosting uncertainty around the availability of
Azeri gas for Europe.
The 31 billion cubic metre capacity Nabucco project has yet
to secure any gas supplies, leaving it vulnerable to Russia's
rival South Stream project, which also plans to feed European
Agreement over the cost to transit Azeri gas over Turkish
territory would allow Nabucco shareholders to start negotiations
with Baku over supplies for Nabucco, conceived to cut Europe's
dependence on Russian gas.
Despite a current European gas glut, demand is expected to
rise again around 2015.
Doubt was cast over the significance of Monday's signing
last week when an Azeri official told reporters that while a
deal was expected to be signed between the two countries, more
detailed commercial and export details would be worked out over
the next 6-8 months.
Negotiations had been complicated by political tensions over
a bid by Turkey and Christian Armenia -- Azerbaijan's enemy in
the conflict over rebel Nagorno-Karabakh -- to end a century of
hostilities and mend ties. The rapprochement collapsed in April.
Besides Turkey's Botas, other Nabucco shareholders include
Austria's OMV (OMVV.VI), Hungary's MOL (MOLB.BU), Germany's RWE
(RWEG.DE), Bulgaria's Bulgargaz and Romania's Transgaz
(Writing by Thomas Grove; editing by James Jukwey)