Turkey and Azerbaijan ink deal for $7 bln gas project

ISTANBUL - Hürriyet Daily News

Turkish PM Erdoğan (R) and Azeri leader Aliyev sign a deal for major gas project. DAILY NEWS photo, Emrah GÜREL

Turkey yesterday signed a deal with Azerbaijan to build the $7 billion Trans-Anatolian natural gas pipeline (TANAP) to carry Azeri gas to European markets. Turkish Energy Minister Taner Yıldız and his Azeri counterpart Natiq Aliyev put their signatures on the agreement.

“Today we have taken a historic step,” said Prime Minister Recep Tayyip Erdoğan in his speech yesterday at the signing ceremony.

“We firmly support the southern natural gas corridor projects that envisage transferring natural gas from the Caspian basin and Central Asia to Europe via alternative routes, in order to provide our own energy supply security and to contribute to the energy supply security of Europe. Realizing the southern natural gas corridor is also important for Azerbaijan to carry its natural gas reserves to Europe in a safe way,” he said.

Erdoğan stressed that the landmark agreement had come on the heels of two significant previously-realized pipeline projects.

“The Baku-Tbilisi-Cayhan crude oil pipeline and the Baku-Tbilisi-Erzurum natural gas pipeline connect each other in a very special way,” he said.

The project will establish an “organic bond” between Azerbaijan and Europe, he added.
“What makes these projects a reality is the fraternity and friendship relations between the two countries,” Azerbaijani President İlham Aliyev said. Azerbaijan has about 2.6 trillion cubic meters (cm) of natural gas reserves, which will be enough to supply gas for the TANAP pipeline for almost 100 years, he added.

10 billion cubic meters of gas

This project is about transferring the natural gas extracted from the second phase of Azerbaijan’s Shah Deniz field to Europe, Erdoğan said in an earlier parliamentary address.

Turkey and Azerbaijan signed in December last year a preliminary agreement on building TANAP to carry 10 billion cm of Azeri gas to European consumers per year, plus 6.0 bcm for itself.

With yesterday’s signing of the accord by Erdoğan and Aliyev in Istanbul, the seven billion-dollar (5.6 billion-euro) project took a step closer to becoming a reality in the next six years.

Erdoğan had previously said the project would pump gas not only from the Shah Deniz field, but also from other resources owned by Baku in the Caspian. “It will also be possible for Turkmenistan to ship gas to this project,” he added.

The signing of the TANAP deal by Turkey and Azerbaijan was expected to happen in the few months following December’s memorandum of understanding, but it took longer to finalize as they failed to agree specifics on stakes, according to local media.

According to December’s plans, Turkey will get 20 percent of the shares in the pipeline that would run to its European border, divided between state-run pipeliner BOTAS and petroleum corporation TPAO. The Azeri state oil company SOCAR would hold the remaining 80 percent.