Azerbaijan’s Oil Fund: South Caucasus gas corridor important for region

After the Contract of the Century the Southern Gas Corridor is an important event in the social-economical life of the region, the head of the State Oil Fund of Azerbaijan Shahmar Movsumov said.

He was commenting on the importance of selection of the Trans Adriatic Pipeline (TAP), which is a part of Southern Gas Corridor, as a route for Azerbaijani gas supplies to Europe.

Movusmov said this event also shows that Azerbaijan, which is situated in a quite difficult geopolitical region, is an important and trusted partner.

The main objectives of Azerbaijan's State Oil Fund, which was established in 1999, are the accumulation of funds and placement of the Fund's assets abroad to minimize the negative impact on the economy, preventing Dutch disease to a certain extent, ensuring the accumulation of funds for future generations and maintaining the current socio-economic processes in the country.

In late June, the consortium for the development of Shah Deniz field announced the selection of TAP project as a route for transporting its gas to European markets. The second pipeline, which competed for the transportation of Azerbaijani gas to Europe, was Nabucco West.

This selection marks the launch of the Southern Gas Corridor - a project that will allow Europe to diversify their supply sources and increase energy security, and will allow Azerbaijan to get a new market. Southern Gas Corridor is a major project, which is designed to meet the European gas needs for decades to come.

TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and then to Western Europe.

The gas which will be produced in the second phase of development of Azerbaijani Shah Deniz gas condensate field, is considered as the main source for the project.

The initial capacity of the TAP pipeline will be 10 billion cubic meters per year with the possibility of expanding to 20 billion cubic meters per year.

TAP shareholders are Swiss AXPO (42,5 percent), Norwegian Statoil (42,5 percent) and German E.ON Ruhrgas (15 percent).

The construction of TAP is expected to start in 2015.