Turkey and Azerbaijan on Monday signed an agreement to establish a consortium that would build a pipeline to transport 16 billion cubic meters (565 billion cubic feet) per year of Azeri gas to Turkey and Europe.
The two countries' energy ministers signed a memorandum of understanding for a consortium between Azerbaijan's state energy company SOCAR, Turkey's state-run pipeline company BOTAS, and the Turkish petroleum company TPAO. The deal allows other oil and gas companies to join the consortium.
The projected pipeline, the Trans Anadolu, would carry gas from Azerbaijan's Shah Deniz II field, across Turkey.
The deal comes at a time when officials are dithering over plans for the construction of the European Union-backed Nabucco pipeline project aimed at reducing the bloc's deliveries from Russia. The project is slated to ship gas from the Caspian region through southern Europe to Austria, but its viability has been called into question amid doubts that enough suppliers can be found to fill the pipeline.
Turkey's Energy Minister Taner Yildiz said the Trans Anadolu could eventually be connected to Nabucco.
Azerbaijan's Industry and Energy Minister Natiq Aliev said the Trans Anadolu pipeline would initially carry 16 billion cubic meters (565 billion cubic feet) per year of gas but the capacity could, in time, increase to 24 billion cubic meters (847 billion cubic feet) per year.
Six billion cubic meters (212 billion cubic feet) of the gas would be sold to Turkey while some 10 billion cubic meters (353 billion cubic feet) would go to European markets, Aliev said.
SOCAR has an 80 percent stake in the Trans Anadolu consortium, while the Turkish companies share 20 percent, Yildiz said.
Officials said construction is scheduled to begin in 2012 and end in 2017.
The pipeline's route and cost would be announced after a feasibility study by SOCAR, Yildiz told reporters.