President orders measures on Azerbaijani gas exports via Southern Gas Corridor
By Aynur Jafarova
Azerbaijani President Ilham Aliyev has signed an order on measures regarding the transportation of Azerbaijani natural gas to world markets via the Southern Gas Corridor on October 29.
The president ordered the establishment of a state commission for full development of Azerbaijan's giant Shah Deniz gas field in the Caspian Sea, extension of South Caucasus Pipeline, a section of the Baku-Tbilisi-Erzurum (BTE) pipeline, and the implementation of Trans-Anatolian gas pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects with a view to ensuring the operation of the Southern Gas Corridor for transporting Azerbaijani gas to the world market.
First Deputy Prime Minister Yagub Eyyubov was elected chairman of the Commission.
Assistant of the President, Deputy Head of the Presidential Administration Ali Asadov, Energy Minister Natig Aliyev, Economy and Industry Minister Shahin Mustafayev, Finance Minister Samir Sharifov, Ecology and Natural Resources Minister Huseyn Bagirov, head of the state energy company SOCAR Rovnag Abdullayev, and Executive Director of the state oil fund SOFAZ Shahmar Movsumov were elected members of the Commission.
Gas to be produced within the second stage of Azerbaijan's Shah Deniz field development will be the main source for the Southern Gas Corridor, which envisages the transportation of Caspian gas to European markets.
In late June, the Shah Deniz consortium announced the selection of TAP as the route to transport its gas to Europe. Another pipeline which was vying for Azerbaijani gas transportation to Europe was Nabucco West.
The selection of TAP marked the start of implementation of the Southern Gas Corridor project that will allow Europe to diversify its supply sources and increase energy security as well as enable Azerbaijan to acquire a new market, Europe.
Shah Deniz, estimated to contain 1.2 trillion cubic meters of gas, is operated by the London-based BP. Partners include SOCAR, Statoil, Total, Lukoil, NICO and TPAO. The partners last year extended the Shah Deniz contract for five years to 2036.
Azerbaijan on September 19 signed 25-year agreements with nine European utilities to export just over 10 billion cubic meters of Shah Deniz gas to the EU from 2019. The buyers included Axpo Trading AG, Bulgargaz EAD, Depa, Gas Natural Fenosa, Hera Trading Srl, Shell Energy Europe, Enel SpA, EON SE and GDF Suez SA.
A final investment decision on Shah Deniz Phase 2 is expected by the end of this year, BP Azerbaijan President Gordon Birrell said in Baku on September 19. Production will start in 2018.
The TANAP project, being developed by Azerbaijan's SOCAR jointly with the Turkish state pipeline company Botas and the energy company TPAO, will deliver Shah Deniz gas to the Turkish-Greek border from eastern Turkey. Initial capacity of the pipeline will be 16 billion cubic meters of gas a year. TANAP will link up with the Trans Adriatic Pipeline (TAP) on the Turkish-Greek border.
The over 700-kilometer Baku-Tbilisi-Erzurum pipeline transports gas produced from the Shah Deniz gas condensate field located in the Azerbaijani sector of the Caspian Sea. The gas is supplied to Georgia and Turkey. Azerbaijan acts as a buyer of gas as well.
The BTE pipeline is to be expanded with the increased capacity amounting to 25 billion cubic meters of gas per year after 2017. In later stages the volume of gas to be transported via this route will be increased to 45 billion cubic meters.