Naxcivan, 9 August 2009
Anatolia News Agency

Turkey and Naxcivan Autonomous Republic signed on Saturday a memorandum of understanding on laying a natural gas pipeline.

The pipeline will be laid from Turkey's eastern city of Igdir to Naxcivan.

"We will sign the memorandum of understanding for almost half billion cubic meters of gas a year," Turkey's Energy & Natural Resources Minister Taner Yildiz said during the ceremony.

Yildiz said Turkey's Pipeline Transportation Corporation (BOTAS) and Azerbaijani oil company SOCAR would hold talks on technical, commercial and legal aspects of the project.

BOTAS and SOCAR executives would meet in Ankara in September to discuss details, Yildiz said.

After the ceremony, Yildiz told AA correspondent that the aim of his visit to Naxcivan was to work on natural gas agreements with Azerbaijan, and visit the Naxcivan Supreme Assembly and learn their views and demands.

Yildiz defined Azerbaijan as a country that had biggest natural gas resources in the region, a gas supplier and source country.

"We want to increase our trade volume for the advantage of the two countries, and we have launched a comprehensive energy diplomacy," he said.

Yildiz said construction of a natural gas pipeline to Turkey via Syria or to Syria via Turkey was also under discussion.

However, there was some problems in pricing transit passages, he said. "I believe we can overcome them," Yildiz also said.

Also, Rovnag Abdullayev, the president of the Azerbaijani state oil company SOCAR, said that they could conclude transit passage prices.

Abdullayev also said that gas would flow to Turkey with the Shah Deniz II project, and then to European countries via Turkey.

The initial phase of Shah Deniz forecasts 318 billion cubic feet of gas production. That would increase to 706 billion cubic feet once Phase 2 comes online in 2012.

Gas production at Shah Deniz began in December 2006.