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“Southern Gas Corridor" CJSC speaks on progress in project's financing

30 May 2018 17:14 (UTC+04:00)
“Southern Gas Corridor" CJSC speaks on progress in project's financing

By Trend

The cost of the Southern Gas Corridor project is currently estimated at more than $40 billion, Afghan Isayev, Director-General of the Southern Gas Corridor Closed Joint Stock Company (CJSC) said during his speech at the 25th Anniversary Caspian International Oil & Gas Conference in Baku May 30.

Some $11.5 billion from the volume of this funding falls to the share of Azerbaijan. To date, $9 billion have been allocated from this amount.

"The cost of the "Shah Deniz-2" project is $22.7 billion. To date, $17.7 billion have been financed from this amount, and the project itself is 99 percent complete. The cost of expanding the South Caucasus Pipeline is $4.6 billion, of which $4.2 billion has been allocated. The project as a whole was implemented by 97.3 percent. The cost of TANAP is estimated at $8 billion (compared to the initial $9.5 billion). To date, $5.4 billion has been spent, and the project has been completed by 94 percent. TAP is estimated at 4.5 billion euros, of which 2.9 billion euros have already been allocated. Progress is estimated at 72.9 percent," Isayev said.

Isayev added that the delivery of the first commercial gas to Turkey will begin on July 1, 2018. He said Azerbaijan's share in the project was financed from several sources.

"In 2014, Eurobonds were issued in the amount of $2.5 billion in the domestic market, which was purchased by the State Oil Fund of Azerbaijan (SOFAZ). In 2015, a capitalization of $2.4 billion was carried out. In 2016 and 2017, two emissions of Eurobonds were carried out on the Irish Stock Exchange in the amount of $1 billion," Isayev said.

"Also, loans from the International Bank for Reconstruction and Development (IBRD, part of the WB group) in the amount of $400 million (fully disbursed), from the Asian Infrastructure Investment Bank in the amount of $600 million (fully disbursed), two loans from the Asian Development Bank in the amount of $500 million (fully disbursed) and $524 million were acquired. In addition, a loan amounting to $500 million was acquired from the European Bank for Reconstruction and Development (EBRD), which is also fully utilized," Isayev said.

The commissioning ceremony of the first stage of the Southern Gas Corridor project was held in Baku May 30.

The Southern Gas Corridor is one of the priority projects for the EU and provides for the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.

At an initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Shah Deniz Stage 2, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).

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