Azernews.Az

BAKU – President Ilham Aliyev expressed hope that the Southern Gas Corridor of pipelines will be implemented and Azerbaijan will export gas from its giant Shahdaniz field to European markets, as leading oil and gas companies gathered in Baku on Tuesday for an annual oil and gas show.

President Aliyev said that the Southern Corridor will be the basis for launching the second stage of Shahdaniz development.

"A joint declaration on the Southern Gas Corridor was signed by the European Union and Azerbaijan this January," he told the opening of the Caspian oil and gas exhibition. "The declaration is not merely the expression of intentions, it is a specific document. I hope that all the required documents will be signed in the near future, so that we will have the groundwork in place to develop Phase 2 of the Shahdaniz project. This will also usher in a new stage in the relations between Azerbaijan and Europe."

The Southern Corridor is a priority EU energy project diversifying supply routes and sources and increasing European energy security. It includes the Nabucco gas pipeline, Trans Adriatic Pipeline (TAP), White Stream, and Turkey-Greece-Italy (ITGI) pipeline. The Shahdaniz field, which holds proven reserves of 1.2 trillion cubic meters of gas, is considered a key source for the Southern Corridor.

The president said further that Azerbaijan was "in the final stage" of talks with Turkey on the transit of Azerbaijani gas.

"We hope that a relevant agreement will be signed soon, and all obstacles in the way of transporting Azerbaijani gas to world markets will be removed," he said.

Aliyev said discovery of the Shahdaniz gas development in Azerbaijan’s sector of the Caspian Sea has had a tremendous impact on world gas markets.

"Azerbaijan is now known around the world not only as an oil-rich, but also as a gas-rich country. In the past, the Shahdaniz gas find was not in the focus of attention, but now, great interest is taken in this field worldwide."

Aliyev said Azerbaijan supports diversifying gas supply routes and is working to reach that goal. "We need new big markets, which are regulated by legislation and where there is a demand for our gas."

The president noted that Azerbaijan’s proven gas reserves amount to 2.2 trillion cubic meters. "This will be enough for us and the consumers for at least 100 years," he said, adding that projections have put the figure above proven reserves.

Aliyev said the discovery by Azerbaijani oil workers of a major field, Umid, in 2010, indicates that the resource-rich South Caucasus republic has considerable gas reserves other than the Shahdaniz deposit. "The find shows that the nearby prospective structures contain sufficient volumes of gas."

The Umid field has estimated reserves of 200 billion cubic meters of gas and 30-40 million tons of condensate. The country also possesses such prospective structures as Absheron, Nakhchivan and Babek.

Aliyev went on to say that $97 billion has been invested in the Azerbaijani economy since 1995. $42bn of the amount was channeled into the oil and gas sector, with most of the funds being foreign investments.

The president said incoming oil revenues are being spent effectively, noting that the state oil fund Sofaz, which was established in 1999, is one of the most transparent institutions in the world.

"It is on account of these very funds that the poverty level in Azerbaijan has dropped to 9 percent from 49 percent," Aliyev said.

He added that the country’s gross domestic product has tripled in the past seven years and currency reserves amount to $35 billion.

On the first day of the 18th Caspian oil and gas exhibition, the region’s leading oil and gas industry event that draws major energy companies to Baku every year, participants read out messages from world leaders, including the European Union chief, the heads of state and government of the United States, Britain, Norway, and Turkey. The letters stressed the importance of cooperation with Azerbaijan and the Caspian oil and gas exhibition.

The exhibition has been relatively low-key in recent years in comparison with the previous events, a development analysts say could be linked to major companies’ having already secured their participation in large-scale energy projects. The energy companies had apparently accomplished their goals, which made them rather inactive at the Baku oil and gas show in the past few years.

Nonetheless, this year’s exhibition is seen as broader and more lively, and has drawn 285 firms from 27 countries, including national groups from Britain, Russia, Turkey and Germany.

According to organizers, the number of participants at the exhibition has increased 25 percent in comparison with last year. The number of local companies has also increased, accounting for 38 percent of all participants, while newcomers make up 12 percent of the participants. Malaysian Petronas, the Netherlands-based Mammoet, UK’s DK Jones Ltd and Shipham Valves are among companies participating for the first time.

The event, organized by the UK-based ITE Group, is attended by VIPs from a number of countries, including the U.S., Georgia, Norway, as well as EU officials.

On the second day of the exhibition, the Caspian oil and gas conference will begin in Baku. Over 500 delegates from 30 countries are expected to attend. The conference will discuss issues including European energy security and Azerbaijan’s role in it, the country’s attractiveness for investments and developing domestic exploration and production of energy resources.