The recent discovery of a massive gas field, Shahdeniz , is estimated to contain as much as 1 trillion cubic meters of natural gas. Therefore, the government has placed a high priority on upgrading the country s natural gas infrastructure and improving the efficiency of gas usage. A government committee is working with foreign consultants on a strategic gas plan for the country. A World Bank financed study Rehabilitation of Azerbaijan s Gas System, and a study to identify the priority investment needs in gas transportation and distribution systems, based on a grant from the Japanese government, are under way. Several companies have also conducted studies about the status of the gas pipeline network in Azerbaijan and their potential capacity to supply the domestic and export markets.
Turkey is regarded as a potential market for natural gas.
As a result of heavy investment during the Soviet area, Azerbaijan is one of the most gasified countries in the world. As in many countries of the Former Soviet Union, the gas transmission and distribution sub-sectors in Azerbaijan are in need of substantial investment for modernization and rehabilitation. Technical and non-technical losses result in at least 15 percent of the gas supply not being accounted for or billed to customers. Parts of the system suffer from severe corrosion, and it is estimated that substantial volumes, as much as 5 percent, are lost through leaky pipes, with adverse impacts on the environment and public safety. The national gas company, Azerigas , which controls all transmission and distribution, has experienced financial difficulties due to the low selling price of gas for residential consumers and very large payment arrearages.