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Azerbaijani, Russian Energy Officials Sign Gas Deals

Azerbaijani President Ilham Aliyev (left) with his Russian counterpart, Dmitry Medvedev, in Baku on June 29
BAKU -- Russia and Azerbaijan have agreed to two major natural-gas deals during a visit to Baku by Russian President Dmitry Medvedev, RFE/RL's Azerbaijani Service reports.

One agreement, signed by Russian gas giant Gazprom's Aleksei Miller and State Oil Company of the Republic of Azerbaijan (SOCAR) President Rovnag Abdullayev, defines the basic terms of gas deliveries from Azerbaijan to Russia under a memorandum signed on March 29.

The sides agreed that Russia would buy 500 million cubic meters of gas a year beginning in 2010, with the possibility of increasing the amount on a formula-based price that takes market prices into account.

According to the document, Russia must come to a final agreement with Azerbaijan by the end of 2009 on the exact quantity to be delivered.

The deal does not include the main stream of gas from the Shahdeniz project, which is subsequently expected to be developed.

Under the other deal reportedly reached in Baku, Russia is named as a priority buyer for gas from Shahdeniz in a memorandum signed by Abdullayev and Miller.

Meanwhile, a statement signed by Medvedev and Azerbaijani President Ilham Aliyev stresses harmony in the positions of both of their Caspian littoral states on the convention on the legal status of the seabed.

The parties noted a growing mutual understanding on a number of key aspects of the convention, including delimitation of the Caspian Sea.