Azerbaijan to open first phase of Southern Gas Corridor to Turkey in July

BAKU-Reuters

The first phase of the Southern Gas Corridor (SGC) pipeline from Azerbaijan to Europe will open in July and could be expanded after it becomes fully operational in 2020, Azeri state energy company SOCAR said.

SGC’s three pipelines - the Trans-Adriatic Pipeline (TAP), the South Caucasus Pipeline through Georgia and the Trans-Anatolian Pipeline (TANAP) through Turkey - will provide the first direct route for carrying gas from Azerbaijan’s giant Shah Deniz field to markets in Europe.

“We will start first commercial supplies of gas to Turkey (through TANAP) in early July this year,” Vitaly Baylarbayov, SOCAR deputy vice president, said in an interview with Reuters.

TAP, the 870-kilometer (541-mile) end piece of the $40 billion corridor, has been more challenging, due to protests against it by environmentalists in Italy.

The European Investment Bank approved a 1.5 billion euro ($1.9 billion) loan for TAP earlier this month and Baylarbayov said that the operating consortium would continue to seek funds for the project.

“We can say now that the (SGC) pipeline will be put into operation on time, in 2020,” Baylarbayov said.

The Shah Deniz I field, which has been pumping gas since 2006, has a production capacity of 8 billion cubic meters (bcm), and output from Shah Deniz II is expected to reach 16 bcm of natural gas per year, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

Baylarbayov said SGC could be expanded if promising new gas fields in Azerbaijan can be developed.

He mentioned the Absheron gas field, where SOCAR is drilling in partnership with French oil company Total, and the Karabakh field which it is due to explore with Norway’s Statoil.

Azerbaijan’s Umid and Babek fields could also be developed as could the next stage of Shah Deniz, he said.

“Many foreign companies are also expressing interest in development of Umid and Babek fields together with SOCAR and we are in talks with them,” he said without elaborating on details of talks.

The next drilling stage on the Absheron field area, which has estimated reserves of at least 350 billion cubic meters (bcm) of gas and 45 million tons of condensate, is due to start this month with production planned for 2020.

Baylarbayov said that the agreement between SOCAR and Statoil on the Karabakh offshore oil and gas field could be signed this year.