ADB to discuss allocating credit on Shah Deniz-2 realization
By Nigar Orujova
The meeting of the Credit Committee of the Asian Development Bank (ADB) on the allocation of credit to LUKOIL Overseas Shah Deniz in the second stage of development of Azerbaijani Shah Deniz offshore gas condensate field will be held on November 13, 2016.
This was said in a report posted on the official website of ADB.
The report indicates that the ADB is ready to allocate $450
million of additional funding to LUKOIL Overseas Shah Deniz in
connection with the Shah Deniz-2 project. As part of the project,
the drilling of over 20 wells, construction of two platforms,
creating of subsea infrastructure, expansion of the Sangachal oil
Terminal and the South Caucasus gas pipeline are also planned.
Of the total funds, $250 million will be allocated on a rate of
LIBOR, and the remaining $200 million would be spent according to a
scheme of additional funding.
The contract on the Shah Deniz offshore field development with
proven reserves of 1.2 trillion cubic meters of gas was signed on
June 4, 1996.
Shares distribution of parties of the agreement (after the
acquisition of Statoil share in the project by SOCAR and BP) is as
follows: BP (operator) 28.8 percent, Statoil, 15.5 percent, NICO,
10 percent, Total, 10 percent, Lukoil, 10 percent, TPAO, 9 percent,
SOCAR, 16.7 percent. After the completion of sale and purchase of
the Total share, the TPAO project share will be 19 percent.
Within the framework of the Shah Deniz project, annual production
of gas will increase from 9 billion cubic meters in the first
phase, by an additional 16 billion cubic meters in the second
phase.
Gas within the second stage of field development will be exported
to Turkey and the European markets by expansion of the South
Caucasus gas pipeline and the construction of the Trans-Anatolian
(TANAP) and the Trans-Adriatic (TAP) gas pipelines.
The cost of the second stage is estimated at $28 billion.