Azernews.Az

By Aynur Jafarova

The extension of cooperation between Azerbaijan's state energy company SOCAR and the German E.ON is of great significance in terms of implementation of the Southern Gas Corridor project.

SOCAR head Rovnag Abdullayev made the remark at the coordinating committee meeting on cooperation between the two companies.

Abdullayev also congratulated the participants on the opening of the E.ON office in Baku and expressed confidence that cooperation between the two companies will contribute to the deepening of economic relations between Azerbaijan and Germany.

E.ON is one of the shareholders of the Trans-Adriatic pipeline (TAP). The company will purchase 40 billion cubic meters (bcm) of the Azerbaijani gas under the 25 year-contract, signed with the Shah Deniz consortium.

The gas which will be produced at the second stage of Azerbaijan's Shah Deniz field development will be the main source of the Southern Gas Corridor, which envisages the transportation of the Caspian gas to the European markets.

The Shah Deniz consortium announced the selection of TAP as the main route for transporting its gas to Europe in late June. Another pipeline which was vying for Azerbaijan's gas transportation to Europe was Nabucco West.

In September 2013, Azerbaijan agreed to sell over 10 billion cubic meters of natural gas a year from the second phase of its Shah Deniz development to nine companies in the European Union. The contracts were signed for 25 years between SOCAR and the European utilities, including Axpo Trading AG, Bulgargaz EAD, Depa, Gas Natural Fenosa, Hera Trading Srl, Shell Energy Europe, Enel SpA, E.ON SE and GDF Suez SA.

The initial capacity of TAP will amount to 10 billion cubic metres per annum with the possibility of expanding to 20 billion cubic metres per annum.

Currently TAP's shareholders include BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Fluxys (16 percent), Total (10 percent), E.ON (9 percent) and Axpo (5 percent).

The construction of TAP is planned to start in 2015.

The selection of TAP marked the start of implementing the Southern Gas Corridor project that will allow Europe to diversify its supply sources and increase energy security, and enable Azerbaijan to acquire a new market-Europe.