AZERBAIJAN COMPLETELY GASIFIED BY THE END OF 2007

 

"Azerbaijan fully meets its domestic gas needs and has a technical potential to prolong gas supplies to Georgia. Imported gas was replaced by gas produced at Shah Deniz and Azeri fields and by SOCAR. At present Azerigaz CJSC receives on daily basis 13 million m3 from SOCAR, 7 million m3 from Azeri field and 5 million m3 from Shah Deniz. Out of the total amount, 10 million m3 is daily supplied to Azerenerjy OJSC", Alikhan Malikov, Chairman, Azerigaz CJSC said today (May 30) at the meeting of the Caspian Integration Business Club (CIBC).

 

At the meeting with the member-companies of the Caspian Integration Business Club Alikhan Malikov spoke about the activity of the joint-stock company and follow-up outlooks.

According to Alikhan Malikov, natural gas has a special role in the fuel-energy complex, dynamic economic growth and social conditions of the Azerbaijan's population.

Pursuant to the Decree "On implementation of measures targeted to improve energy carriers supply to the population and the country's economy" signed by National Leader of Azerbaijan Heydar Aliyev in 2000, Azerigaz CJSC was commissioned to implement the range of measures on FEC development in the country, Alikhan Malikov stressed. In particular, he said, the matter concerned reconstruction of the gas economy, reduction of losses during gas transportation, improvement of gas supply to power stations, keeping accurate record of consumed gas, etc. At the moment the company keeps on working on tasks meeting demands of this document.

From November 2000 to 2007 Azerbaijan imported over 25 billion m3 of Russian gas to provide energy supply to power stations of the country. As a result, saved black oil was sold at the global markets and brought additional benefits to the state treasury, stated the Chairman of Azerigaz CJSC.

On the other hand, Azerigaz CJSC continues gasifying the Azerbaijani regions. Thus, since November 2001 the company has ensured gas supply to 32 regional centers, i.e. to more than 120,000 consumers.

Over the recent years, stressed A. Malikov, Azerigaz CJSC has actively worked in line with the Enactments targeted at intensified social-economic development of the country's regions, improved gas supply to settlements around Baku, development of Azerbaijan's FEC for 2005-2015 and installation of gas metres in residential areas of the country.

In 2005 gas supply to Nakhchivan AR was recommenced after the 14-year break. In 2005-2006 the company restored gas supply to Imishli, Lerik and Yardamly. "Two more regions, Adjabedi and Beylagan, will be gasified before the end of this year", said A. Malikov.

 According to him, over the recent years SOCAR has trended to enhance gas supplies. In 2004 Azerigaz CJSC received 4 billion m3, whereas in 2005 this figure reached 4.2 billion m3 and 4.3 billion m3 in 2006. In 2007 this indicator is projected to be brought to 4.9 billion m3. In total, before the end of 2007 the Azerigaz's system will receive 10 billion m3 of gas including supplies from Azeri and Shah Deniz fields.

"By the end of the gas extraction season there were only 350 million m3 of gas left in the gasholders. Since April 1 170 mln m3 has been pumped into the underground Garadag and Galmaz gasholders", A. Malikov said. 5.5 million m3 of gas is annually pumped into the gasholders. By the end of the season over 1 billion m3 of gas will be pumped into underground gas storages. "This volume enables to meet gas needs of the country in winter", A. Malikov stressed.

The today's capacity of the Garadagh gas storage makes 450-500 million m3, Galmaz gasholder - 750-800 million m3. In future the Garadagh gas storage's capacity is projected to be enhanced up to 2.3 billion m3, Galmaz - 800-1,000 million m3. Thus, stressed he, construction of the third gas storage is unnecessary in Azerbaijan as the total volume of the rest two gasholders will reach 3.2-3.5 billion m3.

Speaking about the cancelled tender on the Garadagh Gasholder Expansion Project, A. Malikov stressed it was related to the decision to back the project at the expense of internal funds and refuse from external financing. The State Oil Company of Azerbaijan will finance reconstruction the Garadagh gas storage, A. Malikov continued. According to him, the Gas Storage Expansion Project will come to nearly $150-160 million.

Following the results for the four months of 2007, SOCAR provided 3.5 billion m3 of gas. Out of this volume, exclusive of Azerenerjy OJSC, consumers were handed over 1.8 billion m3.

One of the major problems faced by Azerigaz CJSC now is collection of payments for the consumed gas. Thus, since early 2007 the scope of payment for consumed gas collected from the population has comprised nearly 48%, which is considered to be too less. "However, the enhanced collection of payments for consumed gas is obvious. For instance, in April 2007 this figure made 60%", A. Malikov noted.

Some changes have been introduced to the tariffs on supplied gas since January 1, 2007. Thus, for the population this tariff comprised 47.2 AZN for 1,000 m3 and 100 AZN for 1,000 m3 for the other consumer groups. The wholesale price on gas sold by SOCAR also underwent certain changes and comprised 42 AZN for 1,000 m3.

At the meeting A. Malikov mentioned installation of meters for the population. According to him, to date 980,000 consumers already have gas meters (96-97%). It enabled to remove problems with registration of consumed gas and motivated rational use of natural gas.

The Smart-Card Type Meters Installation Pilot Project is being implemented in Ganja City. The gas meter of smart-card type gives the opportunity to make prepayments for the consumed gas. "There are no problems in the project's implementation. If we receive positive results, the project will be extended to Baku and Sumgayit", A. Malikov stressed. According to him, the meters already installed in Baku and Sumgayit might be used in other regions of the country.

The serious work is carried out to eliminate losses in the process of gas transportation. As per the Chairman of Azerigaz CJSC, in 2000 technological losses exceeded 10-11%, whereas today this figure does not exceed 5%.

This year the Shah Deniz field is projected to supply Azerigaz CJSC with 1.8 billion m3 of gas, which will be mainly pumped into underground gas storages.

As A. Malikov underlined at the CIBC meeting, Azerbaijan keeps on supplying Georgia with gas. Gas is sold to Georgia at the price of $120 per 1,000 m3. According to him, Azerbaijan has the technical potential to prolong gas supplies for the coming months.

At the meeting representatives of production businesses requested to introduce the notification system in Azerigaz CJSC to make consumers aware of probable cutoffs by various reasons.

The representatives of CIBC member-companies also reached understanding about construction of separate gas pipelines for production entities.

As per Telman Aliyev, President and Chief Executive Director, CIBC, the meeting was held within the framework of the rage of events to be arranged as preparation for the meeting of CIBC member-companies with President of Azerbaijan, Mr. Ilham Aliyev.

The Club's core objectives are to maintain a business-to-government dialogue and shifting petrorevenues to the development of the non-oil sector of the country, Telman Aliyev, President and Chief Executive Director, CIBC said at the meeting.