Azerbaijan outlines energy sector priorities for five years
By Aynur Jafarova
Azerbaijani President Ilham Aliyev during his inaugural speech set the priorities in the country's energy sector for the next five years, the head of Azerbaijan's state energy company SOCAR, Rovnag Abdullayev, told journalists on October 21.
"A basic and strategic task is the implementation of projects as part of ensuring the export of Azerbaijani gas to Europe," Abdullayev said.
In particular, it covers the second stage of developing Azerbaijan's giant Shah Deniz gas field in the Caspian Sea, expansion of the South Caucasus Pipeline, construction of the Trans Anatolian gas pipeline (TANAP) and Trans Adriatic Pipeline (TAP), Abdullayev said.
According to him, $3 billion has already been spent as part of the second stage of the Shah Deniz field development.
In late June, the consortium of Shah Deniz field development announced the selection of TAP as the route to transport its gas to Europe. Another pipeline which was vying for Azerbaijani gas transportation to Europe was Nabucco West.
The selection of TAP marked the start of implementation of the Southern Gas Corridor project that will allow Europe to diversify its supply sources and increase energy security as well as enable Azerbaijan to acquire a new market, Europe.
Shah Deniz, estimated to contain 1.2 trillion cubic meters of gas, is operated by the London-based BP. Partners include SOCAR, Statoil, Total, Lukoil, NICO and TPAO. The partners last year extended the Shah Deniz contract for five years to 2036.
Azerbaijan on September 19 signed 25-year agreements with nine European utilities to export just over 10 billion cubic meters of Shah Deniz gas to the EU starting from 2019. The buyers included Axpo Trading AG, Bulgargaz EAD, Depa, Gas Natural Fenosa, Hera Trading Srl, Shell Energy Europe, Enel SpA, EON SE and GDF Suez SA.
A final investment decision on Shah Deniz Phase 2 is expected by the end of this year, BP Azerbaijan President Gordon Birrell said in Baku on September 19. Production will start in 2018.
The TANAP project, being developed by Azerbaijan's SOCAR jointly with the Turkish state pipeline company Botas and the energy company TPAO, will deliver Shah Deniz gas to the Turkish-Greek border from eastern Turkey. Initial capacity of the pipeline will be 16 billion cubic meters of gas a year. TANAP will link up with the Trans-Adriatic Pipeline (TAP) on the Turkish-Greek border.
Elimination of Bulla Deniz accident
Touching on the gas exploration well at the Caspian field Bulla Deniz that has been blazing since August 17, Abdullayev said the process of eliminating the emergency on the well is nearing completion. According to him, basically all the work has been done as part of the preparatory process for connection of the well.
In particular, it is planned to install a preventer on the well when weather conditions improve. This will allow connecting the well to the network.
"The process of elimination of the accident at the well is in the final stage," Abdullayev said.
The fire flared up at the well at a depth of 5,868 meters. All of the 60 people working on the platform were evacuated. According to SOCAR, the fire erupted at night on August 17 during drilling work. A gas blowout occurred at 23:30 local time, which was followed by fire. As a result of the accident, 62 platform workers were evacuated to safety and no casualties were reported.
Bulla Deniz is estimated to contain 17 billion cubic meters of natural gas. SOCAR has been developing the field since 1975. There are currently 15 operational wells at Bulla Deniz. SOCAR pumped about 62 million metric tons of gas and 11 million tons of condensate from the field between 1975 and 2009.