World Bank Agrees $800 mln loan for Turkey, Azerbaijan gas pipeline

The World Bank’s board of directors approved loans of $400 million each for Turkey and Azerbaijan, for the Trans-Anatolian Natural Gas Pipeline (TANAP) project late Tuesday, December 20, Anadolu Agency reports.

The loans will be supplied through the World Bank’s subsidiary, the International Bank for Reconstruction and Development (IBRD).

Turkey’s Petroleum Pipeline Corporation (BOTAS) will be in receipt of the loan in Turkey guaranteed by the Republic of Turkey with a maturity of 24 years.

In Azerbaijan, the Southern Gas Corridor (SGC) closed Joint Stock Company will obtain the loan with a guarantee from the Republic of Azerbaijan based on a 30 year maturity period.

Around $4 billion in external financing is anticipated for the $8.5 billion project, SOCAR’s President Rovnaq Abdullayev said in previous interview with Anadolu Agency.

In addition to the World Bank, the Multilateral Investment Guarantee Agency, Asian Infrastructure and Investment Bank, European Investment Bank and European Bank for Reconstruction and Development are among the proposed supporters of the project.

“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, but with the help of low oil prices, we reduced our budget to $8.5 billion,” TANAP General Manager Saltuk Duzyol said in an interview with journalists last week.

The TANAP project plans to be operational in 2018 with an initial capacity to carry 16 billion cubic meters (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 BOTAS has a 30 percent share while BP owns a 12 percent stake.

August 29, 2016

by AEA in News

Azerbaijan to enhance its role in forming energy corridors

The Southern Gas Corridor (SGC) project will enhance Azerbaijan’s role in forming eastern and western energy corridors.

Deputy Energy Minister Natig Abbasov made the remarks at the first Eurasian Conference of the International Association for Energy Economics (IAEE) in Baku on August 29.

Despite the decline in oil prices, Azerbaijan continues to realize big transnational projects, said the deputy minister.

As a country located at the intersection of Europe and Asia, Azerbaijan has exceptional opportunities for transportation of energy resources, he noted adding that the SGC is one of the biggest infrastructure and energy projects of Europe.

“As an energy security project, the SGC will bring benefit to all of us – producers, transit countries and consumers – for years to come,” added Abbasov.

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian Sea region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan’s Shah Deniz field is considered as the main source for the Southern Gas Corridor project. Other sources can also connect to this project at a later stage.

He also noted that Azerbaijan made a new contribution to Europe’s energy security with the SGC project.

“TANAP (Trans-Anatolian Natural Gas Pipeline), which will be laid from the Georgian-Turkish border to the Turkish-Greek border, is a very important project in the context of ensuring the regional, particularly European security,” said the deputy minister. “The creation of the energy corridor will be completed by laying the TAP (Trans Adriatic Pipeline), from the Turkish-Greek border to Italy’s south.”

TAP has enough capacity to transport Azerbaijani gas to Europe and will allow creating a complex network of gas pipelines in Europe, said Abbasov.

“Moreover, the construction of the planned Ionian Adriatic Pipeline (IAP) will allow delivering Azerbaijani gas to Bulgaria, Montenegro, Croatia, Bosnia and Herzegovina,” he added.

Currently, Azerbaijan produces 82-88 million cubic meters of gas and 115,000-120,000 tons of oil per day, noted the deputy minister, adding that proved gas reserves of the country amounted to 2.6 trillion cubic meters, oil reserves – two billion tons.

The IAP pipeline is planned to be connected to the TAP pipeline in the Albanian city of Fier.

Azerbaijani gas will be delivered to a number of countries of the southeastern Europe via the IAP pipeline. The pipeline’s capacity will be five billion cubic meters per year.

Organizers of the TAP pipeline have already signed a corresponding memorandum with builders of the IAP, in particular, with Plinacto Ltd. (Croatia), BH-Gas (Bosnia and Herzegovina), Geoplin plinovodi (Slovenia), as well as with governments of Montenegro and Albania.

Abbasov further said that Azerbaijan is considering the possibility to transport Iranian gas through its territory to Europe. He noted that it will be possible through Iran’s joining the TANAP project.

Abbasov didn’t also exclude possibility of transporting Iraqi gas through Azerbaijan to Europe.

TANAP project envisages transportation of gas from Azerbaijan’s Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018, and after completion of the Trans Adriatic Pipeline’s construction, the gas will be delivered to Europe in early 2020.

The First Eurasian Conference organized by the International Association for Energy Economics (IAEE) to focus on the energy economics emerging from the Caspian region. The members of the Council of the International Association for Energy Economics approved the decision on the 39th IAEE Conference in Baku.

The conference to be end on August 31 is attended by 56 speakers from 24 world countries.