Azernews.Az

By Aynur Jafarova

Construction of the Trans-Anatolian gas pipeline (TANAP) will start in 2014, head of Azerbaijan's state energy company SOCAR Rovnag Abdullayev told reporters on June 15.

"In the future, Azerbaijan is expected to participate in large and capital-intensive projects," Abdullayev said.

He reminded that a final decision on the choice of a route of gas export to Europe will be made by the end of this month.

TANAP will bring gas from Azerbaijan to the European edge of Turkey, and could be connected with either Nabucco or TAP pipeline. The TANAP project envisages construction of a pipeline from the eastern border of Turkey to the country's western border to supply gas from the giant Shah Deniz gas condensate field in the Caspian Sea. Initial capacity of the pipeline is expected to be 16 billion cubic meters per year. Around 6 billion cubic meters will be delivered to Turkey, while the rest will be transported to European markets.

The consortium developing the Shah Deniz field is considering both Trans Adriatic Pipeline (TAP) and Nabucco West for gas export. The consortium will make its final decision on the pipeline route in June and a final investment decision by October 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 capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters.

Nabucco West, a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria, and TAP are part of the Southern Gas Corridor, which is one of the EU's priority energy projects. The Southern Gas Corridor aims at diversifying the routes and sources of energy supply, thereby increasing secure delivery.

According to Abdullayev, by the end of this year the second phase of development of the Shah Deniz field as well as the expansion of the South Caucasus Pipeline as part of providing export of Azerbaijani gas to Europe will be confirmed.

"After choosing the gas pipeline project, the partners of the Shah Deniz project will become its shareholders and in fact will take part in its construction," Abdullayev said.

The 700 kilometer South Caucasus Pipeline, a section of the Baku-Tbilisi-Erzurum (BTE) pipeline, transports gas produced from the Shah Deniz field and supplies it to neighboring Georgia and Turkey. Azerbaijan is a buyer of gas as well. In 2012, daily throughput capacity of the pipeline reached 11.1 million cubic meters of gas or 68,000 barrels in the oil equivalent, and gas transit is expected to increase to 16 billion cubic meters as a result of the pipeline's expansion.

Earlier Abdullayev said first gas is to be transported through TANAP in 2019.

DEPA asset purchase to boost SOCAR's export potential

SOCAR is about to acquire assets of Greek gas company DEPA, which will further strengthen the Azerbaijani energy firm's export potential.

Abdullayev noted that the acquisition of Greek assets means SOCAR's access to the gas distribution market.

According to him, the tender procedure for DEPA asset privatization has been completed and SOCAR has started talks with the Greek side.

The process of selling DEPA and gas transportation system operator DESFA is considered one of the key points of the Greek privatization program. Greece is expected to receive up to 1.5 billion euros from the sale. However, it has been reported that Russian giant Gazprom, which was deemed as the main contender for purchasing DEPA, decided not to make a binding offer. A representative of the gas holding said that Gazprom has not received sufficient guarantees that DEPA's financial situation will not deteriorate by the end of the transaction.

The contestants were to submit offers to purchase DEPA and gas transportation system operator DESFA on June 10. However, from the five participants only SOCAR submitted an offer.

DEPA Holding is engaged in wholesale and supply of natural gas to major customers. Through its subsidiary DESFA the holding owns the national gas transportation network and re-gasification terminals. Furthermore, DEPA owns 51 percent of the companies on the retail sale and deliveries of natural gas to small and medium businesses and private customers in Greece.