Georgia, EU discuss implementation of Shah Deniz-2 project

Photo: Georgia, EU discuss implementation of Shah Deniz-2 project
 / Oil&Gas

Tbilisi, Georgia, Feb. 20

By Nana Kirtzkhalia - Trend:

Georgian Prime Minister Irakli Garibashvili has held a meeting with the European Commissioner for Energy Gunther Oettinger in Tbilisi. During the meeting the parties discussed the prospects of the country's accession to the European Energy Association, the office of the Georgian prime minister told Trend on Feb.20.

During the visit it was pointed out that the EU supports the idea of Georgia's accession to European Energy Association. With regard to preparations for accession to the organization, the negotiations on this issue will last about six to eight months, and the relevant agreement will be signed by October 2014.

During the meeting the parties also discussed a number of energy projects and the special attention was paid to the issue of implementation of the second phase of development of Azerbaijani Shah Deniz offshore gas condensate field which will allow increasing the transit of Azerbaijani gas to Europe through Georgia.

Oettinger said that as a result of transit of Azerbaijani gas Georgia will get five percent of the transported volume, which will improve the country's gas supply.

Georgian Foreign Minister Maia Panjikidze and the country's Energy Minister Kakha Kaladze also attended the meeting.

The reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas.

The contract for development of the Shah Deniz offshore field was signed on June 4, 1996.

The agreement's participants include such companies as the State Oil Company of Azerbaijan Republic (SOCAR) with a 16.7 percent share, BP (28.8 percent), Norway's Statoil (15.5 percent), Iran's NICO (10 percent), the French Total (10 percent), Russia's Lukoil (10 percent) and Turkish TPAO (nine percent).

The contract was signed following the adoption on the final investment decision on Shah Deniz -2 on December 17, 2013, in Baku. The final investment decision envisages ensuring production of an additional 16 billion cubic meters of gas per year.

If initially the peak production volume under the first phase of development of the field was planned at the level of nine billion cubic meters, currently work is underway to increase this figure to 10.4 billion cubic meters.

The cost of the second stage of the Shah Deniz development is estimated at $25 billion.

Translated by L.Z.

Edited by C.N.

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