Russia secures Azeri gas

BAKU, Azerbaijan, June 30 (UPI) -- Russian gas giant Gazprom and its counterpart in Azerbaijan reached an agreement for gas purchases that could possibly undermine Europe's Nabucco project.

The State Oil Co. of Azerbaijan Republic and energy monopoly Gazprom signed a deal to secure 1.7 billion cubic feet per year from Azerbaijan in 2010.

Gazprom chief Alexei Miller said the early volumes would come from the massive Shah Deniz gas field.

Shah Deniz in the Caspian Sea is one of the largest finds in recent decades, with roughly 15 trillion cubic feet of natural gas reserves.

Azerbaijan has emerged as the center of a regional race to secure gas reserves. Europe had looked to Shah Deniz to supply its $10.7 billion Nabucco project, while the Gazprom move could fill the Moscow-backed South Stream pipeline to southern Europe.

Russian President Dmitry Medvedev noted, however, that the deal was "absolutely" not based on political motivations, the Moscow Times reports.

He acknowledged, however, that the SOCAR deal was an early sign of major plans for the Russian energy monopoly.

"I think we can further continue this work, keeping in mind the big opportunities and big volumes, which will be growing," he said.