TEHRAN, Dec. 29--Azerbaijan Republic is in talks with Iran to purchase natural gas at $110 per 1,000 cubic meters, Fars reported here Friday.

The Azeri daily paper ’Baku Today’ quoted Yagub Eyubov, deputy prime minister of Azerbaijan, as saying that Iranian authorities have agreed to supply the northern neighbor with 1.8 billion cubic meters of gas per annum, but declined to set the price.

“We will welcome any reasonable price offer from Iran,“ he stressed, adding that $110 per 1000 cubic meters seems to be a fair price.

According to the report, Gazprom Company of Russia, which supplies Azerbaijan with natural gas, asked for $235 per 1,000 cubic meters, $135 more than what it received in 2006, from January 2007.

Azerbaijan produces half of the 10-12 billion cubic meters of natural gas it consumes per annum and imports the rest from Russia.