Azernews.Az

By Aynur Karimova

Iran is interested in Baku's proposal to use Azerbaijan's infrastructure for transporting energy resources to the world markets, Azerbaijan's Energy Minister Natig Aliyev told journalists on November 27.

He recalled that such an initiative was made by Azerbaijan during a summit of Gas Exporting Countries Forum held in Tehran on November 23.

"Azerbaijan enjoys a developed pipeline infrastructure. Besides existing pipelines running to Russia, Georgia, Turkey and Iran, the Southern Gas Corridor project is being implemented. All this infrastructure should be used effectively not only by Azerbaijan, but also by other countries," the minister noted.

“We will hold negotiations, consider their proposals and possibilities of expanding our pipelines to transport Iranian energy resources,” Aliyev further said.

Many international transport routes, including the Baku-Tbilisi-Ceyhan, Baku-Supsa, Baku-Novorossiysk oil pipelines and Baku-Tbilisi-Erzurum, Azerbaijan-Georgia, Azerbaijan-Iran and Azerbaijan-Russia gas pipelines originate namely from Azerbaijan.

Energy-rich Azerbaijan is considered by Tehran as a suitable route for the transit of Iran's massive natural gas resources to European consumers.

Iran, which holds 33.8 trillion cubic meters of proven natural gas reserves – or 18.2 percent of the world’s total proven reserves – has pursued multiple projects for years to pipe natural gas to Europe.

Iran’s geographical location makes it possible for the country to bring its gas to markets in Europe only via routes running through Turkey or Azerbaijan.

Azerbaijan is already on the path to exporting not only its own natural gas to Europe, but Iran’s as well. Although international sanctions are still in place, Tehran seems willing to consider the idea.

It is believed that TANAP, which will later be linked to TAP, can become a reliable route for supplying Iranian gas to Europe. By joining TANAP, Iran is sure to strengthen Azerbaijan’s regional position as a transit country. This will not only bring economic benefits, but also political dividends that will be much more significant.

TAP

Aliyev also stressed the necessity to pay more attention to the implementation of works on construction of the Trans-Adriatic pipeline and to accelerate them.

"Azerbaijan and Georgia have no problems with the implementation of works on the Southern Gas Corridor. Various customs and land issues are resolved in a timely manner. The construction of the Trans-Anatolian pipeline in Turkey is being implemented in accordance with the schedule, and there is no backlog. Physical construction of TAP in Europe will begin in the spring of 2016. To this end, all the necessary permits have been obtained, the documents have been prepared, and an order for pipes has been made," he added.

The Southern Gas Corridor project envisages the transportation of the gas extracted at the giant Shah Deniz field in the Azerbaijani section of the Caspian Sea. Shah Deniz Stage 2 gas will make a 3,500 kilometer journey from the Caspian Sea into Europe. This requires upgrading the existing infrastructure and the development of a chain of new pipelines.

The existing South Caucasus Pipeline will be expanded with a new parallel pipeline across Azerbaijan and Georgia, while the Trans-Anatolian pipeline will transport Shah Deniz gas across Turkey to join the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The Southern Gas Corridor is set to change the energy map of the entire region, connecting gas supplies in the Caspian to markets in Europe for the very first time.

The first gas supplies through the corridor to Georgia and Turkey are given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first gas is produced offshore in Azerbaijan.

The Southern Gas Corridor pipeline system has been designed to be scalable to twice its initial capacity to accommodate additional gas supplies in the future.

Next meeting

Aliyev went on to add that the second Southern Gas Corridor Advisory Council meeting may be held in Baku early 2016.

“The exact time and venue of the second meeting of the advisory council on the project is yet to be determined,” he said. “It may be held in Turkey or Azerbaijan. I believe that it would be appropriate to hold the meeting in Baku. Considering the organizational issues, the meeting is likely to be held in February 2016.”

The minister also noted that the progress of the project and the work done will be discussed at the meeting.

“There are a lot of questions to discuss,” Aliyev stated. “We will get information about the progress of the project, and what kind of work is left to be done. We will discuss which participating countries have problems with the project implementation on their territories.”

Baku hosted the first Southern Gas Corridor Advisory Council meeting on February 12, during which the issues of further promotion of the project and the problems that may arise in its implementation were discussed.

OPEC & GECF

Aliyev also said that Azerbaijan does not expect a sensational decision from the upcoming meeting of OPEC, which will be held in Vienna in December.

"In terms of oil production, no decision can be expected, most likely, it [production] will remain unchanged. The quota of 30 million barrels per day significantly exceeds the daily consumption of oil. OPEC should cut production down in order the oil prices to rise, but this will not happen," he stressed.

Touching upon Azerbaijan's permanent membership to the Gas Exporting Countries Summit, the minister said that Azerbaijan does not hurry to become a member to this organization.

"Today Azerbaijan is a gas exporting country. This fact cannot be denied by anyone. Azerbaijan has huge plans and everyone knows it. Azerbaijan will become an important country for Europe in the coming five years by implementing giant projects in the gas sector. For the first time, Azerbaijan will implement a giant gas project - Southern Gas Corridor. In this regard Azerbaijan could not stay away from the GECF. We decided that Azerbaijan should participate at this forum as an observer member for the time," he noted.

Aliyev believes that the GECF will become a good platform for Azerbaijan as a gas exporting country.

Azerbaijan was announced the observer of the GECF's Tehran meeting on November 23.

AGRI

Aliyev also said that Azerbaijan is ready to participate in the project of Azerbaijan-Georgia-Romania Interconnector if private investors participate in this project.

"This is a very interesting project. Azerbaijan enjoys necessary resources which it could export to Romania. However, there are several unresolved issues," he noted. "It is not clear who will invest in the AGRI, including in the construction of a terminal in Georgia."

The minister believes that Romania will not be able to finance this project alone.

"In this regard the participation of a leading force such as private investors or financial institutions in this project is important," he stated.

AGRI is part of the Southern Gas Corridor, which envisages the transportation of Azerbaijani gas to the Black Sea coast of Georgia via gas pipelines. Azerbaijani gas delivered to Georgia’s Black Sea coast will be liquefied at a special terminal and will then be delivered in tankers to a terminal at the Romanian port of Constanta.

The liquid gas will then be gasified and sent via the country’s gas infrastructure for consumption in Romania and other European countries.

According to preliminary estimates, the cost of the project will vary from 1.2 billion euros to 4.5 billion euros, depending on the capacity of the terminals, which could equal 2-8 billion cubic meters of gas per year.

The participants of the AGRI project are Azerbaijan's state energy giant SOCAR, Georgia's Oil and Gas Corporation, as well as Hungarian MVM and Romanian Romgaz.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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