Turkish TPAO signs loan agreement to buy stake in Shah Deniz project

Photo: Turkish TPAO signs loan agreement to buy stake in Shah Deniz project  / Oil&Gas

Baku, Azerbaijan, Aug. 21

By Emil Ismayilov - Trend:

Turkish TPAO signed on Aug. 21 an agreement with Turkey's Vakifbank and Turkiye Is Bankasi for a $1 billion loan to increase stake in the project on development of Azerbaijan's Shah Deniz gas and condensate field, Anadolu news agency said.

The loan agreement, signed in Ankara, will provide funding for TPAO's acquisition of an additional 10 percent in the Shah Deniz project.

During the signing ceremony, Turkish Energy and Natural Resources Minister Taner Yildiz underscored the need to increase Botas' stake in the Trans Anatolian Natural Gas Pipeline Project (TANAP) from 20 percent to 30 percent, and TPAO's stake in the Shah Deniz project from 9 to 19 percent.

"Profits from these projects in the past year stood at $265 million. We plan to double this amount in 2014-2015 [by means of increasing stakes in these projects]," the minister said.

In May 2004, TPAO and Total Azerbaijan inked a contract on the purchase of Total's 10-percent stake in the Shah Deniz project. Under the contract, TPAO's share in the project will increase to 19 percent.

The contract on development of the Shah Deniz offshore field, which has proven reserves of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

Shares are distributed among parties of the agreement 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.

TPAO's share in the project will be 19 percent following the completion of purchase of Total's share.

Gas produced at the Shah Deniz field is exported to Turkey and Georgia via the South Caucasus Pipeline (Baku-Tbilisi-Erzurum).

Some 10 billion cubic meters of gas will be delivered to Europe as part of the second stage of development of the Shah Deniz.

Edited by S.I.

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