European Commission welcomes final investment decision to extract gas pledged for Europe

Photo: European Commission welcomes final investment decision to extract gas pledged for Europe  / Oil&Gas

Baku, Azerbaijan, Dec. 17

By Aygun Badalova - Trend:

The European Commission welcomed today's final investment decision (FID) on extracting gas from the Shah Deniz II gas field in Azerbaijan, European Commission reported on December, 17.

With this long-awaited decision, it is confirmed that Europe will get 10 billion cubic metres (bcm) per year starting from end 2019. All decisions taken so far - including to choose Trans Adriatic Pipeline (TAP) as pipeline to bring gas to Europe - were conditional on this final investment decision, the report said.

EU Commission President José Manuel Barroso said today's decision by the Shah-Deniz-II-Consortium is a strategic door opener for stronger European energy security.

"Building on the Joint Declaration I signed with President Ilham Aliyev in January 2011, this important step will give the EU direct access to gas from the Caspian basin. This is a major milestone for the diversification of our energy supplies, to the benefit of European consumers and businesse," Barroso said.

This decision to open the Southern Gas Corridor is a real breakthrough, EU Energy Commissioner Günther Oettinger. "Through its further enlargement, the corridor will have the potential to meet up to 20 per cent of the EU's gas needs in the long term," he added.

The signing ceremony of the final investment decision on Shah Deniz-2 project was held in Baku today.

Azerbaijani President Ilham Aliyev, his spouse Mehriban Aliyeva, the heads of several countries and governments attend the event.

Shah Deniz-2 project authorization means the transition of the project from the concept into an immediate implementation stage.

The contract to develop the offshore Shah Deniz field was signed on June 4, 1996.

Participants to the agreement are: BP (operator) - 28.8 percent, Statoil - 15.5 percent, NICO - 10 percent, Total - 10 percent, Lukoil - 10 percent, TPAO - nine percent, SOCAR - 16.7 percent.

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

The cost of the second phase of development of Shah Deniz gas condensate field is estimated at $25 billion.

Within the second phase of development it is planned to produce some 16 billion cubic meters of gas (within the first phase - 9 billion), six billion of which will be transported to Turkey and ten billion to Europe.

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