Baku, Azerbaijan, Jan. 21
By Aygun Badalova - Trend:
Trans Adriatic Pipeline AG (TAP) remains in close contact with a variety of lending institutions, a source in TAP told Trend.
"Apart from TAP shareholder financing, TAP remains in close contact with a variety of lending institutions," the source said.
The source mentioned that in March 2013, TAP selected Société Générale as financial advisor to the project. Based on the decision, made by TAP's shareholders and the consortium of Azerbaijani Shah Deniz field development, the Société Générale assists TAP's management team with structuring the pipeline's project finance strategy, carrying out a bankability review and formulating a credible and deliverable funding plan.
With regard to the cost of the project, the source stressed that TAP is part of the $45 billion Southern Gas Corridor value chain.
"TAP will conclude several large contracts this year including onshore and offshore pipeline construction, compressor stations, line pipes, and will be in a position to reveal its cost once construction has started," the source said.
The TAP project was selected by the consortium of Azerbaijani Shah Deniz field development as the transportation route to the European markets. The approximately 870 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.
TAP's shareholding is comprised of BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Fluxys (19 percent), Enagás (16 percent) and Axpo (five percent). Construction of TAP is planned to begin in 2016. The initial capacity of TAP will be 10 billion cubic meters per year, but it can easily be expanded to 20 billion cubic meters per year as the new volumes of gas come on stream.
The first sales of Azerbaijani gas to Georgia and Turkey are targeted for late 2018, first deliveries to Europe will follow approximately a year later.
In 2013 the European Bank of Reconstruction and Development (EBRD) said the bank was considering an opportunity of participation in financing of TAP and TANAP (Trans-Anatolian Gas Pipeline) projects. Suma Chakrabarti, the EBRD president called these projects "very important for Azerbaijan and the entire region." He also said that before making a decision (on financing), a wide range of issues must be discussed and much more work needs to be done.
Aygun Badalova is Trend Agency's staff journalist, follow her on Twitter:@AygunBadalova