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Turkey buys SOCAR's 10 pct share in TANAP project

2 June 2014 12:31 (UTC+04:00)
Turkey buys SOCAR's 10 pct share in TANAP project

By Aynur Jafarova

Turkey has bought 10 percent of Azerbaijani state energy company SOCAR's share in the Trans-Anatolian (TANAP) pipeline project.

The contract on the sale of SOCAR's share to Turkey's state-owned Botas was signed by Botas Director General Mehmet Konuk and SOCAR head Rovnag Abdullayev in Istanbul on May 30.

The contract will help to increase Botas' share in the project from 20 percent to 30 percent.

The parties also signed a contract on transportation of gas via TANAP.

Azerbaijan's Energy Minister Natig Aliyev and his Turkish counterpart Taner Yildiz signed a Memorandum of Understanding (MoU) on the TANAP project.

SOCAR has repeatedly expressed its intention to retain at least 51 of the 80 percent share of the TANAP project. The British BP, the operator of the development project of the giant Shah Deniz - the gas condensate field in the Azerbaijani sector of the Caspian Sea - has decided to purchase a 12 percent share of the project.

TANAP, developed by Azerbaijan's state energy company SOCAR in collaboration with Turkish Botas and the energy company TPAO, will deliver Shah Deniz gas to the Turkish-Greek border from eastern Turkey.

The initial capacity of the pipeline will be 16 billion cubic meters of gas a year. TANAP will link up with Trans-Adriatic (TAP) pipeline on the Turkish-Greek border.

About six billion cubic meters of gas will be delivered to Turkey and the rest to Europe. TANAP shareholders plan to lay the pipeline's foundation in the second quarter of 2014, and commission it in 2018. The costs of the TANAP project are estimated at $10 billion to $11 billion.

Also, an agreement on purchase and sale of Total's share in the project on development of Azerbaijan's giant Shah Deniz field in the Caspian Sea was signed by heads of Turkish Petroleum Corporation (TPAO) and Total Azerbaijan companies, Besim Sisman and Christian Giudicelli. This agreement raised TPAO's stake in the project to 19 percent from a previous 9 percent. Total is to exit the project.

Speaking at the ceremony of signing these documents, SOCAR head said the signing of a contract on gas purchases and sales between TPAO and Total Azerbaijan would allow the Turkish side to increase its share in the Shah Deniz project from nine percent to 19 percent.

Abdullayev noted the implementation of the Shah Deniz and TANAP projects will bring great profits both to Azerbaijan and Turkey.

Azerbaijan's Energy Minister, in his turn, said the signing of the documents is a new important event in the history of bilateral relations between Azerbaijan and Turkey.

Aliyev noted the Southern Gas Corridor project, which requires investments worth $45 billion, and in particular its constituent part TANAP, are the largest energy projects of the Caspian and Mediterranean seas.

"TANAP, the construction of which is envisaged to start in April 2015, will contribute to the opening of thousands of new jobs, while transportation will bring great benefits and incomes to Turkey," the minister said.

Aliyev went on to say that the Southern Gas Corridor is a project that will allow Europe diversifying its hydrocarbon sources and strengthen the energy security, while allowing Azerbaijan to obtain a new market in Europe.

In his remarks, Turkish Prime Minister Recep Tayyip Erdogan said the TANAP project will create long-term and strong relations with the European countries similar to the relationship between Turkey and Azerbaijan.

"We are witnessing important progress in the implementation of the TANAP project. We assess this project in terms of the development of trade and investment cooperation. The implementation of the project for constructing the Trans-Anatolian gas pipeline will allow creating long-term and strong relations with the European countries similar to the relationship between Turkey and Azerbaijan," he noted.

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