BP says Caspian gas pipeline’s Georgia section ready by mid-2018

TBILISI - Reuters

REUTERS photo

BP plans to complete by mid-2018 the Georgian section of a $40-billion strategic pipeline bringing Caspian gas from Azerbaijan into Europe, the British energy company’s country manager for Georgia said.

The so-called southern gas corridor, which is meant to reduce the European Union’s dependence on Russian energy, will start at Azerbaijan’s Shah Deniz II gas field and cross through Georgia, Turkey, Greece, Albania and Italy. It is the largest attempt so far to bring new supply sources to Europe.

Around 10 billion cubic meters (bcm) per year of Azeri gas should reach Europe by 2020 through the Trans Adriatic Pipeline, with another 6 bcm destined for Georgia through the South Caucasus Pipeline and Turkey through the Trans-Anatolian Pipeline.

“All of the project’s components are ... on schedule as far as their intended delivery day for when commercial operations are due to begin in the middle to the later part of the next year,” Chris Schlueter told Reuters, referring to the Georgian section.

The Georgian part of the project includes the construction of two compressor stations, a 65-km pipeline and a metering station near the Turkish border.

Schlueter said work on the pipeline had finished, with one compressor station 95 percent ready and the other compressor station 55 percent complete. Construction of the metering station was under way, he said, without giving specifics.

“Later this year we’ll start to introduce the gas to the pipeline in order to get it ready for operations,” he said.
Schlueter said the project’s capital expenditure in 2016 was $550 million. In the first quarter of this year the figure was around $100 million, slightly less than in the same quarter of 2016.

“Peak spending was last year and we will start to slow down (in terms of investment) this year,” he said.
Schlueter said peak production from the Shah Deniz II field was expected to occur several years after 2020.