Turkey’s Petroleum Pipeline Corporation (BOTAŞ) and Azerbaijan's energy giant SOCAR’s Turkey Petrokimya Inc. (STPAS) inked a memorandum of understanding for the delivery of up to 1.7 billion cubic meters (bcm) of natural gas that will run until Dec. 31, 2024.

Under the agreement signed between the countries' energy ministries on Dec. 22 and published in the Official Gazette, BOTAŞ will deliver enough natural gas to STPAS to cover the needs of its companies.

The agreement is a renewal and addition to the existing gas sales and purchase contract (SPA) already in place. It covers the import costs relating to the SPA, the transportation tariff and other transportation costs incurred by BOTAŞ in Turkey, and all applicable taxes.

However, a separate annual contract will be drawn up between the two state-owned companies covering the delivery quantities, taking into consideration BOTAŞ's take or pay obligations.

The parties are expected to utilize the full available capacity of the Baku-Tbilisi-Erzurum and Trans Anatolian Natural Gas Pipeline (TANAP) for the transmission of additional natural gas volumes that will be produced and transported from upstream projects in Azerbaijan.

The memorandum, which is subject to amendments and updates, will take effect once each country has completed its respective internal legal procedures.