Russia to double gas imports from Azerbaijan in a fresh blow to EU-touted pipeline project

Gazprom to double gas imports from Azerbaijan

MOSCOW — Russia’s Gazprom on Friday clinched a deal to double supplies from Azerbaijan in a bid to expand its control over gas produced by former Soviet republics.

Gazprom and the State Oil and Gas Company of Azerbaijan signed an agreement to boost Azerbaijan’s gas supplies to Russia to 2 million cubic meters next year, Gazprom said in a statement. The Azeri company also committed to sell over 2 million cubic meters of gas in 2012, Gazprom said. This will be four times as much as the amount Russia contracted in the first big gas deal with Azerbaijan in June last year.

The deal was signed after talks between Azeri President Ilham Aliyev and Russian President Dmitry Medvedev in Azerbaijan.

Aliyev said Azerbaijan is hoping to further boost energy supplies to Gazprom, Russian news agencies reported

The European Union was planning to use Azerbaijan’s vast energy resources as a key source of gas for a major pipeline project, Nabucco, to bring Caspian and Central Asian gas to Europe, bypassing Russia.

Moscow, meanwhile, has been lobbying for a pipeline via Russia named South Stream, which would tunnel under the Black Sea to reach southern Europe.

Friday’s deal casts fresh doubts over Nabucco’s ability to get enough gas to make it worthwile.

Russia has been anxious to control gas flows from former Soviet neighbors in order to have flexibility in pricing its own gas exports.

Gazprom has been buying most of Turkmenistan’s gas in an effort to keep this Central Asian nation from becoming an independent exporter. But Turkemenistan has been steadily raising the prices, making these gas imports increasingly unprofitable.

China also made a dramatic entry into the competition for Central Asian gas last year, when a new pipeline joining Turkmenistan and China began operating in December.

Medvedev on Friday brushed off the accusations that Russia is trying to corner regional energy supply and deprive Nabucco of an important source of gas.

“We cannot and must not hamper other projects,” Medvedev said, quoted by RIA Novosti.

Azerbaijan’s Aliyev added that his country “has never viewed its activities in the gas industry as unfair competition”.

(This version CORRECTS Corrects transliteration of “Ilham”)