Identifier
Created
Classification
Origin
09BAKU985
2009-12-23 08:27:00
CONFIDENTIAL
Embassy Baku
Cable title:
SOCAR SIGNS MOU TO SELL GAS TO IRAN
how-toVZCZCXRO3769 PP RUEHAG RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHROV RUEHSL RUEHSR RUEHTRO DE RUEHKB #0985 3570827 ZNY CCCCC ZZH P 230827Z DEC 09 FM AMEMBASSY BAKU TO RUEHC/SECSTATE WASHDC PRIORITY 2198 INFO RUCNCIS/CIS COLLECTIVE PRIORITY RUCNMEM/EU MEMBER STATES PRIORITY RUCNIRA/IRAN COLLECTIVE PRIORITY RUEHAK/AMEMBASSY ANKARA PRIORITY 3738 RUEHDE/AMCONSUL DUBAI PRIORITY 0012 RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY RUEAIIA/CIA WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RUEKDIA/DIA WASHDC PRIORITY
C O N F I D E N T I A L BAKU 000985
SIPDIS
DEPT EUR/CARC
DEPT FOR S/EEE AMB MORNINGSTAR AND DSTEIN
DEPT FOR EEB/ESC DAS DOUG HENGEL, AGREENSTEIN
DEPT FOR S/CT FOR GROBERTSON, DKURSCH, CLARKS
DOE FOR LEKIMOFF, MBURPOE, AND DGOTTFRIED
E.O. 12958: DECL: 12/22/2019
TAGS: ENRG EPET ECON PREL IR AJ TU TX
SUBJECT: SOCAR SIGNS MOU TO SELL GAS TO IRAN
REF: A. BAKU 969
B. BAKU 919
Classified By: Charge d'Affaires Donald Lu, for
Reasons 1.4 (B,D, E)
C O N F I D E N T I A L BAKU 000985
SIPDIS
DEPT EUR/CARC
DEPT FOR S/EEE AMB MORNINGSTAR AND DSTEIN
DEPT FOR EEB/ESC DAS DOUG HENGEL, AGREENSTEIN
DEPT FOR S/CT FOR GROBERTSON, DKURSCH, CLARKS
DOE FOR LEKIMOFF, MBURPOE, AND DGOTTFRIED
E.O. 12958: DECL: 12/22/2019
TAGS: ENRG EPET ECON PREL IR AJ TU TX
SUBJECT: SOCAR SIGNS MOU TO SELL GAS TO IRAN
REF: A. BAKU 969
B. BAKU 919
Classified By: Charge d'Affaires Donald Lu, for
Reasons 1.4 (B,D, E)
1. (C) Following up on a discussion regarding FM
Mammadyarov and SOCAR delegation trip to Tehran (reftel),
SOCAR Vice President Elshad Nassirov told Energy Off in an 18
December email: "We have signed a memo with Iran on sales of
1 million cubic meters (mcm) (per day) for 100 days. (This
is) not a swap. The contract has not been signed yet."
(Note: The reference to a "swap" concerns an existing gas
supply arrangement under which Azerbaijan ship gas to
Northern Iran and in turn the Iranians provide equivalent
volumes of gas to the Azerbaijani enclave of Nakhchivan. End
note)
2. (C) Nassirov thus indicated that the new deal goes beyond
the existing gas swap arrangement, which was recently renewed
with Iran. Ensuring gas supplies to the geographically
isolated Nakhchivan region, which borders Armenia, Iran and
Turkey (minimally) nonetheless remain a challenge for the
GOAJ.
3. (C) In a December 22 meeting at the MFA, Deputy Foreign
Minister Khalaf Khalofov also confirmed the contract. He
characterized it as "a small contract, one million cubic
meters/day, for 100 days. After that," he said, "we would
need to conclude a new agreement. We will think about
continuing it." He added that, "The Iranians are always
interested in buying gas from us. They want up to 2.5
billion cubic meters from us."
4. (C) Comment: Per reftel B, Azerbaijan continues efforts
to expand its regional options. Such an arrangement may send
a timely signal to the Turks, who still have not come to
terms with SOCAR and consortium partners on Shah Deniz Phase
I pricing and Shah Deniz Phase II sales and transit, but may
not be meant to do so. This is a small volume of additional
gas (one-tenth of a BCM) for Iran. It will not be sourced
from Shah Deniz or marketed by the consortium. Rather, it
will be sourced from SOCAR's own production, and likely
represents excess gas that is not needed for the Azerbaijani
domestic market or for storage. Thus, this gas deal in some
aspects resembles SOCAR's recent supply arrangements to
Russia's Dagestan, and therefore is not particularly meant
and probably will not effectively serve as a signal to the
future of Shah Deniz gas. A major Azerbaijan-Iran gas deal
remains highly unlikely. End comment.
LU
SIPDIS
DEPT EUR/CARC
DEPT FOR S/EEE AMB MORNINGSTAR AND DSTEIN
DEPT FOR EEB/ESC DAS DOUG HENGEL, AGREENSTEIN
DEPT FOR S/CT FOR GROBERTSON, DKURSCH, CLARKS
DOE FOR LEKIMOFF, MBURPOE, AND DGOTTFRIED
E.O. 12958: DECL: 12/22/2019
TAGS: ENRG EPET ECON PREL IR AJ TU TX
SUBJECT: SOCAR SIGNS MOU TO SELL GAS TO IRAN
REF: A. BAKU 969
B. BAKU 919
Classified By: Charge d'Affaires Donald Lu, for
Reasons 1.4 (B,D, E)
1. (C) Following up on a discussion regarding FM
Mammadyarov and SOCAR delegation trip to Tehran (reftel),
SOCAR Vice President Elshad Nassirov told Energy Off in an 18
December email: "We have signed a memo with Iran on sales of
1 million cubic meters (mcm) (per day) for 100 days. (This
is) not a swap. The contract has not been signed yet."
(Note: The reference to a "swap" concerns an existing gas
supply arrangement under which Azerbaijan ship gas to
Northern Iran and in turn the Iranians provide equivalent
volumes of gas to the Azerbaijani enclave of Nakhchivan. End
note)
2. (C) Nassirov thus indicated that the new deal goes beyond
the existing gas swap arrangement, which was recently renewed
with Iran. Ensuring gas supplies to the geographically
isolated Nakhchivan region, which borders Armenia, Iran and
Turkey (minimally) nonetheless remain a challenge for the
GOAJ.
3. (C) In a December 22 meeting at the MFA, Deputy Foreign
Minister Khalaf Khalofov also confirmed the contract. He
characterized it as "a small contract, one million cubic
meters/day, for 100 days. After that," he said, "we would
need to conclude a new agreement. We will think about
continuing it." He added that, "The Iranians are always
interested in buying gas from us. They want up to 2.5
billion cubic meters from us."
4. (C) Comment: Per reftel B, Azerbaijan continues efforts
to expand its regional options. Such an arrangement may send
a timely signal to the Turks, who still have not come to
terms with SOCAR and consortium partners on Shah Deniz Phase
I pricing and Shah Deniz Phase II sales and transit, but may
not be meant to do so. This is a small volume of additional
gas (one-tenth of a BCM) for Iran. It will not be sourced
from Shah Deniz or marketed by the consortium. Rather, it
will be sourced from SOCAR's own production, and likely
represents excess gas that is not needed for the Azerbaijani
domestic market or for storage. Thus, this gas deal in some
aspects resembles SOCAR's recent supply arrangements to
Russia's Dagestan, and therefore is not particularly meant
and probably will not effectively serve as a signal to the
future of Shah Deniz gas. A major Azerbaijan-Iran gas deal
remains highly unlikely. End comment.
LU