Interview with George Gunderson, the President of Statoil Azerbaijan
Question: How much capital does Statoil plan to invest in economy of Azerbaijan in 2005? How much is the company gong to invest during its operations in the country?
Answer: Statoil is partner in the four major projects in Azerbaijan, ACG, Shah Deniz, SCP and BTC. To date Statoil has invested a total of ca. 2 billion USD in these projects.
Question: In what stage is the coordination of the issue with the Georgian side Рѕn the signing of an additional agreement on gas supply? Will it be delivered to Georgia in the volume of 1.3 billion cu m a year?
Answer: Georgia, through GIOC, has contracts with Azerbaijan Gas Supply Company (AGSC) and SCP Option Co to buy up to 0.8 bcm/a of Shah Deniz gas. All volumes from Shah Deniz Stage 1 are in principle sold out to Turkey (BOTAS), Azerbaijan and Georgia (GIOC). An intergovernmental work group between Azerbaijan and Georgia has been established a.o. to consider the possibilities for Georgia to purchase additional volumes. Statoil, as operator for AGSC, is amongst others, advisor to the Ministry for Industry and Energy in Azerbaijan in this intergovernmental work group. If Georgia is going to purchase more gas from Azerbaijan than already agreed, an agreement on such sales should be made between Georgia and Azerbaijan directly.
Question: How perspective does Statoil see in sale of Azerbaijani gas under Stage 2? Is it possible to speak concretely on a group of countries, or a definite country which would buy gas under Stage 2 more than others?
Answer: Statoil is chairing the Shah Deniz Gas Commercial Committee, and we are considering a wide range of different markets for the gas from further stages of the Shah Deniz development. Statoil considers Azerbaijan an interesting market also for a Stage 2 and assume that parts of the gas volume from a Stage 2 development could be sold domestically. Statoil also envisage parts of the production being exported, thereby expanding Azerbaijan’s position as a gas exporting nation. Among the export opportunities are also the possibility to sell this gas into the EU market. Many alternatives are currently being considered, but the conclusion has still not been made.
Question: How do you think, will the SCP ready to admit gas from the Shah-Daniz field in case any company intends to export gas via the SCP having initial contracts, for instance, with Turkey? If so, when and in what volume the company could pump its gas through SCP? If no, why?
Answer: The SCP is primarily constructed in order to transport the gas from the Shah Deniz field, and this field alone needs will need all available capacity in the pipeline for many years. There are currently no plans for transportation of third party gas through SCP.
Question: Is the Georgian infrastructure ready to receive gas from SCP? If no, what actions does the country implement in this respect? How will the gas delivery to Azerbaijan and Georgia be implemented? Is their complete infrastructure in Azerbaijan to receive own share of from Shah-Daniz?
Answer: Statoil, as operator for AGSC and South Caucasus Pipeline Company (SCPC), is preparing for the start-up of for gas deliveries to Georgia, Azerbaijan and Turkey. We are establishing teams to handle the daily operations of these two companies. We expect that the buyers will be ready to receive the contractual volumes by late September 2006 when the gas deliveries will start.
Question: What volume of gas is it expected to sell to Turkey in 2007? Can the company name schedule of gas delivery to Turkey and other countries (Azerbaijan and Georgia) per years until the commencement of Stage-2 project?
Answer: The annual contract commitments in the different agreements is confidential information. Statoil has as a policy not to reveal such information.
Question: Could Iran use SCP if it wants to sell gas to Georgia, or still this country will have to work through SWAP, i.e. Azerbaijan will deliver gas to Georgia and in exchange Iran will supply fuel, for instance, to Nakhchivan Autonomous Republic of Azerbaijan?
Answer: Gas from Shah Deniz Stage 1 will for many years utilize the full capacity of SCP. Depending on what will be the market for gas from further stages of Shah Deniz, the SCP may also be needed to transport these volumes. There are currently no plans for transportation of third party gas, and we do not want to speculate in such alternatives.