Azernews.Az

By Aynur Jafarova

Azerbaijan's state oil fund SOFAZ will start financing the share of the state in the Trans-Anatolian Pipeline (TANAP) and potentially could finance Nabucco West or the Trans-Adriatic Pipeline (TAP) which will carry Azerbaijani gas supplies to Europe, SOFAZ Executive Director Shahmar Movsumov said in his recent interview.

"We are going to start financing the share of the government in TANAP project. Right now it's at a very preliminary stage. We have not yet identified the share, how much the project is going to cost and all these details," Movsumov said.

Asked if there is a possibility that SOFAZ could become involved in financing TAP or Nabucco, Movsumov said, "Potentially yes. But it's all just talks. Right now there is nothing on the table," he said.

Asked if Russia's South Stream is competition for the EU-backed Southern Gas Corridor, Movsumov said that the European market is big enough for those supplies that are coming both from Russia and Azerbaijan. "I don't see there is any competition."

Azerbaijan has plenty of gas. The gas capacity of the Caspian Sea is much more than oil, Movsumov said. "The potential of the Caspian Sea is huge but in order to expand this capacity you need to drill," he said.

"Unfortunately in the Caspian Sea we have only three oil rigs and all of them are booked for the next five-ten years. That's why State Oil Fund is staring a new project this year. We want to finance construction of new drilling rig and we already have major international companies line up for that rig. For example with Absheron, they have to drill, they have to start but they don't have a rig," he said, referring to the offshore gas field in Azerbaijan's sector of the Caspian Sea.

The Southern Gas Corridor is one of the EU's priority energy projects aimed at diversifying the routes and sources of energy supply, thereby increasing secure delivery. Gas which will be produced during the second stage of the Azerbaijani Shah Deniz field development is considered as the main source for the Southern Gas Corridor projects.

The TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe. TAP's initial capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters.

Nabucco West is a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria. Designated capacity of the project is up to 31 billion cubic meters per year.

The TANAP project envisages gas transportation from the Shah Deniz field to Europe via Turkey. Initial capacity of the pipeline is expected to be 16 billion cubic meters per year. Around 6 billion cubic meters will be delivered to Turkey, while the rest will be transported to Europe.

The South Stream project includes the construction of a gas pipeline across the Black Sea to the South and Central European countries.

SOFAZ was set up in December 1999 by a presidential decree as an extra-budgetary entity which accumulates and manages oil and gas revenues of Azerbaijan. Its primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations. As of January 1, 2013, the assets of SOFAZ totaled over $34.1 billion.