Baku, Azerbaijan, Oct.8
By Emil Ismayilov - Trend:
European Bank for Reconstruction and Development (EBRD) will make a final decision on the allocation of credit to LUKOIL for provision of its interest share in the framework of the second stage of Shah Deniz gas condensate field development in the Azerbaijani sector of the Caspian Sea January 28, 2015, EBRD's website said.
The statement said that the total amount of the loan is $1 billion, half of which will be provided in the form of a syndicated loan of the EBRD and the Asian Development Bank (ADB).
The LUKOIL company has a 10 percent stake in the project development of the Shah Deniz field.
The total amount of additional funding of the LUKOIL in the framework of the equity in the Shah Deniz 2 project amounts to $3 billion.
"LUKOIL Overseas Shah Deniz" company also plans to attract a loan from ADB, the approval of which is expected on the credit committee Nov. 13, 2016.
The ADB is ready to allocate $450 million of additional funding to LUKOIL Overseas Shah Deniz in connection with the Shah Deniz-2 project, within the framework of which drilling of over 20 wells, the construction of two platforms, creating of subsea infrastructure, expansion of the Sangachal oil Terminal and the South Caucasus gas pipeline are planned.
Of the total funds provided, $250 million will be allocated on a rate of LIBOR, and the remaining $200 million will be allocated through additional funding.
The contract on the Shah Deniz offshore field development with proven reserves of 1.2 trillion cubic meters of gas was signed on June 4, 1996.
Within the framework of the Shah Deniz project annual production of gas will increase from 9 billion cubic meters in the first phase, by an additional 16 billion cubic meters in the second phase.
The cost of the second stage of Shah Deniz development is estimated at $28 billion.
Shares distribution of parties of the agreement (after the acquisition of Statoil share in the project by SOCAR and BP) is as follows: BP (operator) - 28.8 percent, Statoil - 15.5 percent, NICO - 10 percent, Total - 10 percent, Lukoil - 10 percent, TPAO - 9 percent, SOCAR - 16.7 percent. After the completion of sale and purchase of the Total share, the TPAO project share will be 19 percent.
Gas within the second stage of field development will be exported to Turkey and the European markets by expanding of the South Caucasus gas pipeline and the construction of the Trans-Anatolian (TANAP) and the Trans-Adriatic (TAP) gas pipelines.
On December 17, 2013, a final investment decision was made on the Stage 2 of the Shah Deniz offshore gas and condensate field's development. The gas produced at this field will first go to the European market (10 billion cubic meters). Around six billion cubic meters will be annually supplied to Turkey.