TANAP’s construction accelerates, costs decrease: Project chief

ANKARA - Anadolu Agency

AA photo

The construction of the Trans Anatolian Natural Gas Pipeline (TANAP) project, which will to carry Azeri gas to Europe, is ahead of schedule and under budget by $3.2 billion, as more than half of the pipeline construction has already been completed, according to the TANAP’s general manager. 

The project aims to bring natural gas, produced from Azerbaijan’s Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey but also to Europe via the Trans-Adriatic Pipeline (TAP).        

“More than half of the project, or 55 percent, of its construction was completed at the end of November and we are ahead of schedule,” TANAP General Manager Saltuk Düzyol told journalists at the project’s construction field trip on Dec. 8.        

Düzyol said the pipeline – which is 1,200 kilometers in length and 56 inches in width - has been welded, and a 1,570-kilometer-long area has been cleared and prepared for its laying.        

“We will supply 2 billion cubic meters (bcm) of natural gas by the end of June 2018 out of a total of 6 bcm to Turkey via TANAP. We will send another 2 bcm the next year followed by 2 bcm more in 2020, as per Turkey’s demand,” he added.        

The TANAP starts on the Georgia-Turkey border in the Turkish city of Ardahan, from where it connects to the South Caucasus Pipeline (SCP) and ends at the Turkey-Greece border in the city of Edirne, where it feeds into the Trans Adriatic Pipeline (TAP).        

Düzyol said the project consists of four phases, with phase one starting from Ardahan and going through to Kars, Erzurum and then onto Erzincan, Bayburt, Gümüşhane and Giresun. Phase two will extend to Sivas, and phase three will extend from Yozgat to Eskisehir. The third phase is 60 percent complete, 55 days ahead of schedule.    
    
The last phase begins from Eskisehir and passes through Bilecik, Kütahya, Bursa, Balıkesir, Çanakkale, Tekirdağ and Edirne before ending at the Greek border in the İpsala district of Edirne.    
    
According to plans, TANAP will deliver natural gas to Europe from the Turkey-Greece border from June 2019.        
The TANAP project is due to become operational in 2018 with an initial capacity to carry 16 bcm of Azeri gas through Georgia to Turkey. While 6 bcm will be for Turkey’s domestic gas consumption, the rest is destined for transfer to Greece, Albania, and Italy and further into Europe.        

Azeri energy giant State Oil Company of Azerbaijan (SOCAR) holds a 58 percent interest in TANAP, Turkey’s BOTAŞ has a 30 percent share, and BP owns a 12 percent stake.        


TANAP ‘to save $3.2 billion’
       
Some of the most expensive items for pipeline projects are fuel and steel, which saw a decrease in costs as a result of low oil prices.        

“The slump in global oil prices and low commodity prices also gives the TANAP project an opportunity to shrink its budget and save up to $3.2 billion, initially, the investment budget for TANAP was estimated at $11.7 billion,” Düzyol said. “With the help of low oil prices, we reduced our budget to $8.5 billion.”      
 
Global crude oil prices decreased from their highest level of $115 per barrel in June 2014 to a low of $28 on Jan. 18, 2016.        

Currently Brent oil prices are fluctuating at around $55 per barrel after the OPEC and Non-OPEC countries agreed to lower their oil production.        

With a projected budget of $8.5 billion, TANAP’s total capacity is planned to increase to 23 bcm by 2023 and to 31 bcm by 2026.