EBRD to extend loan for Azerbaijan’s biggest gas project

BAKU-Reuters

16 billion cubic meters per year of gas produced from the giant Shah Deniz field will be carried some 3,500 kilometers to provide energy for millions of consumers in Georgia, Turkey, Greece, Bulgaria and Italy.

The European Bank for Reconstruction and Development (EBRD) will extend a syndicated loan for Azerbaijan’s biggest gas project, Shah Deniz II, EBRD President Suma Chakrabarti said on May 8.

The size and terms of the loan had yet to be decided, he said during a visit to Baku.

Shah Deniz is being developed by a consortium led by BP, Azeri state energy company SOCAR and others, and will offer an alternative gas supplier for Europe as the continent tries to reduce its reliance on Russian energy.
Shah Deniz I has been pumping gas since 2006 and has an annual production capacity of about 10 billion cubic meters (bcm) of natural gas.

Shah Deniz II is expected to produce 16 bcm of gas a year from 2019-2020, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

Chakrabarti also said the EBRD might issue bonds in the Azeri currency, the manat, this year.

Azerbaijan’s central bank devalued the manat in February by 33.5 percent to the dollar and by 30 percent to the euro as slumping oil prices and an economic crisis in major trading partner Russia put pressure on the currency.

The EBRD issued bonds in Georgian lari and Armenian drams last year in a move to develop the local capital markets.