Turkey and Azerbaijan are expected to sign Shah Deniz natural gas agreements next week, Turkey's energy ministry executives said on Tuesday.

Turkey's Energy & Natural Resources Minister Taner Yildiz and Azerbaijani President Ilham Aliyev will sign the Shah Deniz 1 and 2 agreements in Istanbul next week.

Aliyev will be in Turkey on June 7-8 for the Third Summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA).

The ministry executives said negotiations on the agreements were over, and two countries had reached an agreement in principle on a few technical issues.

Also, Turkish executives may discuss energy issues with Russian Prime Minister Vladimir Putin, who will also be in Istanbul on the same days.

Shah Deniz gas field is the largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan, approximately 70 kilometres (43 mi) southeast of Bakubat, at a depth of 600 metres (2,000 ft). The field covers approximately 860 square kilometres (330 sq mi).

The Shah Deniz field is operated by BP which has a share of 25.5%. Other partners include Statoil (25.5%), SOCAR (10%), Total S.A. (10%), LukAgip, a joint company of Eni and LUKoil (10%), NICO(10%), and TPAO (9%).

Within the framework of the Shah Deniz II project, gas will flow to European countries via Turkey.

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

Gas production at Shah Deniz began in December 2006.


AA