Baku extends Absheron deadline in price tussle with Total

AbsheronAzerbaijan has agreed to give France’s Total more time to submit its development plans for the first phase of the Absheron gas field as the two sides attempt to reach a compromise over price. After Shah Deniz, Absheron is Azerbaijan’s biggest gas field field with reserves of 350bn m3 of gas and 45m metric tons of gas condensate. The state-run SOCAR and Total each own 40% of the project with the French electric utility company Engie holding the remainder.
The development plan was initially expected to be submitted this November and the delay comes as Total looks at ways of reducing production costs in a bid to meet Baku’s demands on price. “Total wants to sell gas at higher prices in domestic markets, but Baku is keen to purchase the gas at a fixed, low price, regardless of global gas price fluctuations,” an industry source said.