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ADB issues $1 million to Shah Deniz Phase 2

28 June 2016 15:23 (UTC+04:00)
ADB issues $1 million to Shah Deniz Phase 2

By Fatma Babayeva

Asian Development Bank (ADB) has issued a grant worth $1 million as the Project Preparatory Technical Assistance (PPTA) within the development of the second phase of the Azerbaijani Shah Deniz field, the bank reported.

The ADB Baku office confirmed the allocation of the grant on June 24.

Agreement on the PPTA was signed on June 6, 2016, and came into force on the same day. All the work should be completed before December 31, 2016.

The PPTA will undertake the necessary due diligence for preparing the Shah Deniz Phase 2 Investment Plan and tranche 1, and will assist in the pre-implementation work.

ADB’s Shah Deniz Phase 2 Investment Plan is $1.505 billion. This plan will support the Azerbaijani government's efforts to finance Shah Deniz-2 project, and is aimed at improving the country's fiscal position by increasing revenues from natural gas exports from the expanded Shah Deniz field and creating additional jobs.

Reserves of Shah Deniz gas and condensate field are estimated at 1.2 trillion cubic meters. Within the framework of Shah Deniz 2 project realization, the annual output of the natural gas will increase from 9 billion cubic meters (first phase) to 16 billion cubic meters (second phase).

The cost of the Phase 2 development amounts to $25 billion. The first gas extraction is expected in 2018, which will be the main source of the Southern Gas Pipeline project.

Gas will be transferred to both Turkey and Europe via the extension of South Caucasus Pipeline and the construction of Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) pipelines.

Azerbaijan will export 6 billion cubic meters a year of Shah Deniz gas to Turkey and 10 billion cubic meters to the European market Europe.

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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

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