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AHK Azerbaijan: Germany interested in further development of SGC

21 December 2018 10:04 (UTC+04:00)
AHK Azerbaijan: Germany interested in further development of SGC

By Trend

Germany is considerably interested in the further development of the Southern Gas Corridor (SGC) project, Executive Director of the German-Azerbaijani Chamber of Commerce (AHK Azerbaijan) Tobias Baumann told Trend.

Baumann said that a number of global and well-known German companies are already actively involved in the construction of the SGC by providing services, expertise, machinery and key pipeline materials at the various phases of the project.

"We are witnessing a growing number of long-term partnerships as well as successfully established joint ventures between German and Azerbaijani companies," he underlined.

Further, Baumann said that a more promising economic outlook and the government’s ongoing strategy of diversifying the economy will pave a way for the German manufacturers of machinery and equipment, as well as chemical products and raw materials in the non-oil sectors, including construction, infrastructure, transport and building materials.

"German companies can offer their relevant expertise and knowledge particularly in the electricity and renewable energy sectors to increase the efficiency of the energy system in Azerbaijan, which is also among the main priorities of the Azerbaijani government in the following years. In this context, they can be involved in the repair process of existing solar, wind, and bioenergy plants along with the development of feasibility studies on new plants," Baumann stressed.

He further noted that oil and gas sector tops the priority areas of cooperation between Azerbaijan and Germany, adding that considering that the international oil companies are the main clients of German companies operating in the country, the new exploration and development projects will create long-term prospects for German companies as contractors of the oil majors in 2019-2020.

"Furthermore, digitalization has recently become a crucial topic of the oil and gas sector. In this view, the upstream industry also opens up great opportunities for German companies offering information technologies and digital services," Baumann noted.

He went on to say that within the diversification policy of the government, the current focus of the development strategy is maximizing integration of Azerbaijan’s upstream-midstream-downstream oil and gas value chain, adding that hereby, petrochemical industry is the field with great prospects for cooperation with German companies.

Baumann pointed out that development of the long-term energy strategy remains one of the key priorities in Azerbaijan, further saying that the Azerbaijani government aims to attract new sources of private investments into the energy sector in 2020-2022 by ensuring a more effective, flexible and transparent legislation and regulatory framework.

"With that, there will be new chances for German companies to further position themselves in the market as providers of technology, equipment and expertise," he said.

Southern Gas Corridor envisages transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.

On May 29, Baku hosted the launch ceremony of the first phase of the Southern Gas Corridor.

The gas from the Azerbaijani Shah Deniz field has already gone through the first segment of the Southern Gas Corridor - from the Sangachal terminal to the expanded South Caucasus Pipeline.

The Southern Gas Corridor project aims to increase and diversify European energy supply by bringing gas resources from the Caspian Sea to markets in Europe. The Southern Gas Corridor comprises the following four projects: (1) operation of Shah Deniz natural gas-condensate field (SD1 project) and its full-field development (SD2 project), (2) the operation of the South Caucasus Pipeline (SCP project) and its expansion (SCPX project), (3) the construction of the Trans-Anatolian Natural Gas Pipeline (TANAP project) and (4) the construction of the Trans Adriatic Pipeline (TAP project).

The projects have an estimated investment cost of approximately $40 billion.

Upon completion, the SD2 project will add a further 16 bcm of natural gas per annum to 10.9 bcma (maximum production capacity) already produced under SD1 project.

Total length of the newly constructed SCPX, TANAP and TAP pipelines will be around 3,206 kilometers.

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