Azerbaijan agrees with Ukraine's acquisition of TANAP stake - envoy
By Sara Rajabova
Azerbaijan agrees with Ukraine's participation in a consortium on the construction of Trans-Anatolia Pipeline (TANAP) that seeks to transport gas from resource-rich Azerbaijan to European markets through Turkey, Azerbaijani Ambassador to Ukraine Eynulla Madatli said in an interview with the Ukrainian edition The Day.
The diplomat noted that the TANAP gas pipeline is open to all concerned companies. He reminded that Azerbaijan holds 80 per cent in the project.
"Azerbaijan will keep 51 per cent of its share in this project and distribute the other 29 per cent between the interested countries and companies. If Ukraine, as one of the potential biggest gas consumers, becomes a participant of the consortium for construction of the TANAP gas pipeline, we will be just happy, since Azerbaijan is interested in energy independence and security of Ukraine," he said.
Azerbaijani state energy firm SOCAR owns 80 per cent in the TANAP project, while Turkish BOTAS holds the remaining 20 per cent.
"There is much political will for expansion and deepening of contacts regarding the supplies of energy...to Ukraine," Madatli said. "However, the postponement of the document signing between the two presidents in 2011 was caused by Ukraine's desire to view other routes [except an LNG-terminal] of Azerbaijani gas supplies. In particular, Ukraine's participation in TANAP gas pipeline, which has a great perspective, is being actively discussed."
The ambassador also noted that the negotiations on establishing a joint venture for delivery of liquefied gas to the LNG terminal continue.
"I can't say exactly when the negotiations will be completed and the documents signed. But I think that many issues will be solved before the visit of Azerbaijani President Ilham Aliyev to Ukraine. This visit will likely take place early in 2013."
Madatli said that after the construction of the TANAP gas pipeline Ukraine will be able to get gas without construction of additional pipeline infrastructure, as there is already a gas pipeline from Turkey to Bulgaria, from Bulgaria to Romania, and from Romania to Ukraine.
Initial capacity of TANAP is expected to be 16 billion cubic meters a year. Around 6 billion cubic meters will be delivered to Turkey, while the rest will be transported to Europe.
According to preliminary estimates, the cost of the gas pipeline will be around $7 billion. The construction of the pipeline is scheduled to begin in 2014 and finish in 2018.
Earlier, Ukrainian Ambassador to Turkey Sergey Korsunsky said he considers that TANAP would mean the end of South Stream gas pipeline, which also aims to transport natural gas to Europe.
However, Russia's Gazprom has set a date for starting the construction of the South Stream pipeline, which a strong rival to the Turkish-Azerbaijani project TANAP, Hurriyet Daily News reported.
Gazprom, the largest gas extractor in the world, announced on Tuesday that it would begin the construction of the South Stream pipeline to Europe on December 7. The pipeline will rival other European alternatives that lean on the Azerbaijani-Turkish initiative to carry Caspian gas through western Turkey.
Gazprom has long placed its bets on South Stream while also expanding the capacity of a sister project under the Baltic Sea called Nord Stream. Its officials sounded confident on Tuesday, AFP reported.
After signing an investment decision on the project with Slovenia, company boss Alexei Miller said a similar deal with Bulgaria -- the only transit country yet to approve South Stream -- would be sealed on Nov. 15.
"We intend to sign the final investment decision on the sea section on Nov. 14 and a deal with Bulgaria on Nov. 15," news agencies quoted Miller as saying, following talks with Slovenian energy officials.
This project also runs in direct competition to the Nabucco project, which EU countries have been discussing for much of the past decade in order to reduce their dependence on Russian gas. Nabucco intends to channel gas from the Caspian Sea and Middle East to Europe via Turkey.
But EU states have struggled to secure delivery deals and are debating the merits of making the massive investment amid their financial woes.