Azerbaijan, Baku, Feb. 28 / Trend E.Ismayilov /
Implementation of the second phase of the development of the Shah Deniz Azerbaijani offshore gas condensate field and creation of the necessary infrastructure to transport natural gas, may require investment of about $40 billion, a high-ranking representative of the State Oil Company of Azerbaijan (SOCAR) told Trend on Tuesday.
He said about $22 billion is needed to implement the second stage of the Shah Deniz development and the rest is to establish and expand the necessary infrastructure for gas supplies from Baku to Turkey. This is for the potential construction of the Trans Anadolu Pipeline (TANAP) or Nabucco pipeline (from the Georgian-Turkish border to Baumgarten) and the construction of the Trans Adriatic Pipeline (TAP), or shortened Nabucco (from the Bulgarian border to Baumgarten).
"All of this requires an investment of at least $40 billion. A significant project such as this requires serious backing and the Shah Deniz consortium has no right to make an error," the SOCAR representative said.
Regarding authorisation of the second stage of the development, the representative said that a final investment decision on the selection of the right project to supply gas to Europe, as well as the solution to all commercial, technological and legal aspects of the project will be decided on June 30, 2013.
On Oct. 1, Nabucco, TAP and ITGI (Southern Gas Corridor projects) submitted their final proposals to the Shah Deniz consortium.
However in late February, the Consortium said it does not consider ITGI (Interconnector Turkey-Greece-Italy) as the right project to deliver Azerbaijani gas to the European markets. According to the Consortium's decision, Trans Adriatic Pipeline (TAP) is a priority route for the export of Azerbaijani gas to Italy. The Consortium will continue its negotiations with TAP, along with the other concerned projects to the Central Europe.
By June 30, 2012 which is the day an intergovernmental agreement is to be signed between Turkey and Azerbaijan, the drafting process of TANAP should be completed. Simultaneously, by the same deadline the choice between SEEP and Nabucco should also be completed.
The final decision on the choice between the Trans-Gas Pipeline (TAP) and the project which will be chosen between the SEEP and Nabucco, will be made on June 30, 2013.
Azerbaijan plans to export 10 billion cubic metres of gas to Europe within the second stage of Shah Deniz field development.
The Shah Deniz consortium is currently considering three possible export routes, whereas in an earlier selection there were four and together with ITGI, Nabucco, South East Europe Pipeline (SEEP) and TAP projects are considered potential routes at present.
The reserves of Shah Deniz are estimated at 1.2 trillion cubic metres of gas. Most of the gas, which will be produced during the second stage of the field's development, is planned to be delivered to Europe.
The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 per cent, Statoil - 25.5 per cent, NICO - 10 per cent, Total - 10 per cent, LukAgip - 10 per cent, TPAO - nine per cent and SOCAR-10 per cent.
