Gazprom Sees New Deals With Azerbaijan Next week

gazpromMOSCOW (Reuters)–Russia’s gas export monopoly Gazprom expects to sign new important deals with Azerbaijan next week, the firm’s chief executive Alexei Miller told an annual shareholders meeting on Friday.

Russian President Dmitry Medvedev is due to visit Azerbaijan next week, and will likely ask its leadership to pledge vast supplies of natural gas to fill Russian pipelines instead of a rival pipelines to Europe.

Analysts say the Azeri gas could allow Europe to justify the $11 billion construction of a new pipeline, Nabucco, which has not yet signed up a clear source of gas to fill the pipes once it is built.

Azerbaijan has contracts to supply Turkey with around 8 billion cubic metres and wants to more than double production by 2015.

Although Gazprom says it does not see the EU-backed pipeline as a rival, it has stepped up efforts to outpace it with its own new project to southern Europe, South Stream, which it is building together with Italy’s energy major ENI

Many European politicians have expressed concerns that projects such as South Stream will further boost the continent’s reliance on gas from Russia, which already supplyies a quarter of Europe’s needs.

“Europe’s quest for diversification is understandable but it should not become a fetish,” said Miller.

He added that by looking to diversify sources of supply Europe may even achieve a negative surprise result. “There will be a lot of diversification but not much of reliability and stability.”

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