ADB discusses allocating loan to LUKOIL within Shah Deniz-2 project

Economy Materials 27 May 2015 17:39 (UTC +04:00)

Baku, Azerbaijan, May 27

By Maksim Tsurkov - Trend:

The Asian Development Bank (ADB) is still discussing the issue of allocation of credit to LUKOIL Overseas within the framework of the Shah Deniz-2 project, Director of Public Management, Financial Sector, and Trade Division of ADB Betty Wilkinson told Trend May 25.

She said that this issue will depend on the financial situation of Azerbaijan and the project itself.

"When we finance the private sector, we take into account two factors," Wilkinson said. "First, we consider the situation of the country, the possible risks, and then proceed to considering the project. Further decisions are made on the basis of these two factors. As for the question of financing the share of LUKOIL in the Shah Deniz -2, this issue is being discussed in the established order."

The ADB in Azerbaijan has several projects in the energy sector, according to the head of the department.

"The Azerbaijani government has chosen this area as a priority, and we already have a number of projects here," said Wilkinson. "When it comes to the private sector, the projects are formed after we receive a request from the relevant organization. I am sure that there are such requests at the moment, but I do not know their details."

It was earlier reported that the ADB is ready to allocate $450 million of additional funding to LUKOIL Overseas Shah Deniz in connection with the Shah Deniz-2 project.

The credit committee meeting of the Asian Development Bank (ADB) on the allocation of credit to LUKOIL Overseas Shah Deniz in the second stage of development of Azerbaijani Shah Deniz offshore gas condensate field will be held on November 13, 2016.

As part of the implementation of the Shah Deniz projects, the annual gas production volume will increase from 9 billion cubic meters (within the first phase) by additional 16 billion cubic meters in the second phase. Two offshore platforms will be installed and over 20 subsea wells will be drilled to produce additional volumes of gas within Shah Deniz-2 project.

As part of the second stage of the field's development, gas will be exported to Turkey and European markets by expanding the South Caucasus gas pipeline and the construction of Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipelines.

The contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserve is estimated at 1.2 trillion cubic meters of gas.

The shareholders are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Statoil (15.5 percent), Lukoil (10 percent), NICO (10 percent) and TPAO (19 percent).

The volume of gas produced at Shah Deniz field stood at 9.9 billion cubic meters in 2014, while the volume of condensate production at this field totaled 2.3 million metric tons (18.7 million barrels), compared to 9.8 billion cubic meters of gas and 2.48 million metric tons of condensate (19.6 million barrels) in 2013.

Edited by CN

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