Azernews.Az

The partners of Azerbaijan's Shah Deniz gas field development in the Caspian Sea and Trans Adriatic Pipeline (TAP) have signed an agreement to secure funding for the project, TAP reported on Thursday.

According to the agreement, these funds will contribute towards continued work in several important areas during the period running up to the final routing decision.

Earlier this year, the Shah Deniz consortium made TAP a priority route for the exports of Azerbaijani gas to Italy in southern Europe. In June, the consortium selected Nabucco West as the single pipeline option for the potential export of Shah Deniz Stage 2 gas to Central Europe. The final decision on a pipeline export route is expected in 2013.

The agreement between the Shah Deniz partners and TAP also envisions an option for the Shah Deniz shareholders to take up to 50 percent equity in the pipeline project.

According to TAP's Managing Director Kjetil Tungland, the signing of this agreement is a significant vote of confidence in the quality of TAP's technical and commercial solutions from key industry players, and underpins the Cooperation Agreement that was signed between TAP and Shah Deniz in June.

"Our cooperation with Shah Deniz is now even closer and more far-reaching than before. This agreement will strengthen our continued working relationship in the run-up to the final routing decision. We remain confident of a positive outcome," Tungland said.

TAP, which is one of the projects within the Southern Gas Corridor, is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into Western Europe. Gas to be produced during the second stage of Shah Deniz development is the main supply source for the project.

TAP's initial capacity will be 10 billion cubic meters per year, expandable to 20 billion cubic meters per year. TAP's shareholders are EGL of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).