Earlier, the head of the State Oil Company of Azerbaijan Republic (SOCAR) denied any need of this company’s gas imports from Russia, saying that private Azerbaijan Methanol Company (AzMeCo) might have asked Russia to deliver gas, but SOCAR doesn’t need Russian gas.

SOCAR cut gas delivery to AzMeCo in May due to delayed payments and the head of this private company was arrested, charged on bad loans to Azerbaijani banks, but was then released in June.

A source at SOCAR told Natural Gas Europe on July 1 that supplying gas to AzMeCo was resumed by SOCAR.

AzMeCo was inaugurated in July 2013. Since August 2014, AzMeCo has produced and exported 191 thousand tons of methanol.

British Petroleum has bought 80 percent of this volume at $328 per ton. SOCAR’s gas price for AzMeCo was $120 per 1000 

cubic meters.

The plant is still working with half capacity, while the full production capacity of this plant is 720,000 tons per annum.

What do statistics say?

There is not any statistic about SOCAR’s gas delivery volumes to AzMeCo and it is also unknown when the company would work at full capacity, but SOCAR’s statistics indicate that Azerbaijan has no need for gas imports.

Since 2010, SOCAR started gas export to Russia by supplying 1 billion cubic meters, but the volume doubled in 2012. The amount reached 1.37 bcm in 2013 and plunged to 0.21 last year.

An Azerbaijani official told Natural Gas Europe on June 10 that Baku halted gas delivery to Russia in 2015 due to increasing domestic needs. Last year Azerbaijan justified that gas delivery to Russia plunged in 2014 due to construction projects in northern regions.

Now, Russia says it is ready to export 1 bcm to Azerbaijan by the end of current year.

The chairman of Management Board of Gazprom Alexei Miller explained during a meeting with the President of SOCAR Rovnag Abdullayev on June 19 that "due to the increasing domestic gas consumption and economic growth in Azerbaijan, Gazprom is ready to satisfy the country’s demand for gas import in required volumes.”

This amount of gas is considered large for AzMeCo, which has a total revenue from methanol production reaching approximately $45 million from August 2014 to May 2015.

On the other hand, SOCAR’s gas price for AzMeCo is three times less than Russian gas price for Turkey.

According to official statistics, Azerbaijan has produced 8.476 bcm of marketing gas in January-May, about 11.5 percent more than the same period last year.

On the other hand, during this period, Azerbaijan exported 3.842 bcm, indicating a 4.1 percent growth year-on-year.

According to plans, Azerbaijan’s gas production is expected to increase in the next year as well.

Therefore, it seems the country has no problem supplying domestic sectors with gas, at least for the next two years.

(Natural Gas Europe)