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Southern Gas Corridor may be expanded in long term

12 April 2013 12:28 (UTC+04:00)
Southern Gas Corridor may be expanded in long term

By Aynur Jafarova

More than one pipeline will be needed for the Trans Adriatic Pipeline (TAP) project within the Southern Gas Corridor in the long term perspective, TAP's Head of Communications Lisa Givert says.

"When the Southern Gas Corridor becomes a reality, demands for gas which will flow through it will increase and there will be a need for more than just one pipeline," she said on Thursday.

The Southern Corridor is one of the EU's priority energy projects aimed at diversifying the routes and sources of energy supply, thereby increasing secure delivery. Gas which will be produced during the second stage of the Azerbaijani Shah Deniz field development is considered as the main source for the Southern Gas Corridor projects.

Currently, the Shah Deniz consortium is considering two options for its gas transportation to Europe - Trans Adriatic Pipeline (TAP) and Nabucco West. The final decision on the pipeline route will be made in June 2013.

The TAP project 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. TAP's initial pipeline capacity will be 10 billion cubic metres per year, but it is easily expandable to 20 billion cubic metres per year.

Givert said that initially, only 10 billion cubic meters (bcm) of gas produced within the second stage of the Shah Deniz gas field development is available for sale to Europe.

"This means that currently there are only enough gas volumes available for one pipeline to be built," Givert said, adding that TAP is being built to transport 10 bcm of gas, however its capacity can easily be expanded to more than 20 bcm per year, when new gas volumes will be available.

As for the further volumes of gas, which will be available from other fields in Azerbaijan, Givert said that the TAP project is scalable and has been designed with the opportunity to increase its capacity twofold, so it can easily accommodate further gas volumes following the initial Shah Deniz-2 gas volumes.

Earlier, Director general of Turkish Foreign Ministry's department for multilateral economic affairs and energy, Mithat Rende, said that in the long run both the Nabucco West and the TAP pipelines will be necessary.

According to oil pricing agency Platts, Rende's comment reflects a strengthening emphasis that the planned Southern Gas Corridor should be of sufficient size to carry not only gas from Shah Deniz, but substantial volumes of gas from other Azerbaijani fields and possibly from Iraq as well.

This week, Total E&P Azerbaijan said that it expects to receive its first gas from the Absheron field in Azerbaijan in 2020. The field's potential reserves amount to 350 billion cubic meters of gas and 45 million tons of condensate.

According to the General Manager of Total E&P Azerbaijan, Christian Giudicelli, during first phase of the field's development, the annual production volume is expected to be three to five billion cubic meters of gas.

Meanwhile on Thursday, Albanian Ministry of Environment, Forest and Water Administration approved the Environmental Social Impact Assessment (ESIA) for Trans Adriatic Pipeline.

Submitted on January 21, 2013, the ESIA maps-out all possible environmental, cultural or socio-economic impacts of the pipeline and includes measures to avoid and mitigate any possible impacts the pipeline may have during and after construction.

Also, the Greek Parliament ratified the Intergovernmental Agreement (IGA) between Albania, Italy and Greece on the construction and operation of the TAP project. The IGA between the three countries, which was signed in Athens on February 13, 2013, confirms the host countries' support for TAP and their cooperation for the project's timely implementation.

The ratification of the IGA by the Greek Parliament continues TAP's progress in the country, with the project now working on successfully completing the Host Government Agreement (HGA) with Greece. The HGA outlines the parameters of engagement between TAP and the Greek Government, such as permitting process, implementation of technical and safety standards and the land easement procedure.

"As the final decision for the Southern Route by the Shah Deniz Consortium draws closer, we thank the Greek Parliament's ratification of the IGA. We maintain our confidence that the excellent collaboration with Greece will continue and that together we will provide Shah Deniz with the most compelling offer," TAP's Managing Director Kjetil Tungland said.

According to TAP's External Affairs Director Michael Hoffmann, this marks an important step towards the final decision by Shah Deniz and underlines the progress and advanced status of the TAP project.

"The ratification by the Greek parliament emphasizes the common benefits TAP will bring and highlights our common values," Hoffmann said.

In late March, Nabucco Gas Pipeline International GmbH and TAP submitted their final offers to the consortium of Shah Deniz field development. The offers will allow the Shah Deniz consortium to conduct the final evaluation of each of the transportation options and make a final decision on the preferred export route to Europe in June, 2013.

Nabucco West is a short-cut version of Nabucco project, which envisages construction of the pipeline from the Turkish-Bulgarian border to Austria.

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