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Putin courts gas-rich Azerbaijan

Azeri natural gas seen by Europe as Russian back-breaker.

By Daniel J. Graeber
Russian President Putin meets Azeri counterpart to discuss economic ties in the Caspian region. Azerbaijan's natural gas reserves at center of tug-of-war between Kremlin and Brussels. Photo courtesy of the Kremlin.
Russian President Putin meets Azeri counterpart to discuss economic ties in the Caspian region. Azerbaijan's natural gas reserves at center of tug-of-war between Kremlin and Brussels. Photo courtesy of the Kremlin.

BAKU, Azerbaijan, June 15 (UPI) -- Trade between Russian and gas-rich Azerbaijan is expected to continue along an upward trajectory, Russian President Vladimir Putin said.

Putin met during the weekend in Baku, the capital of Azerbaijan, with Azeri President Ilham Aliyev to discuss economic opportunities in the Caspian region. The Azeri president said trade relations between both sides remained strong, even as global economic growth struggles to emerge from recession.

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"I would like to note that despite the economic turbulence, trade between our countries has been growing," Putin added. "Last year it went up by about 12 percent, I believe, while in the first quarter of this year [it went up] by almost 6 percent."

Russia's economy, in particular, has stumbled on the back of dual strains from sanctions imposed in response to the crises in Ukraine and the low price of crude oil. For natural gas, British energy company BP said in an annual review that Russian production declined 4.3 percent from last year which, in terms of volume, was among the largest drops in the world.

Azerbaijan, a former Soviet republic, holds sizable reserves of natural gas and European leaders are waiting to tap into its offshore Shah Deniz in an effort to break Russia's grip on the energy sector.

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Gazprom Deputy Chairman Alexander Medvedev said last week the European economy will be about 1.7 trillion cubic feet short of what it needs to keep the economy moving by 2025. He added that Russian gas sent through Ukraine will stop moving to European markets after 2019.

Russian meets about a quarter of Europe's natural gas needs, though most of that runs that the Soviet-era pipeline network in Ukraine.

BP said pipeline shipments declined 6.2 percent globally for the largest decline on record, with Russian deliveries down 11.8 percent.

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