Azerbaijan, Baku, 14 February / Trend / StatoilHydro and Swiss utility EGL have signed an agreement setting up a 50-50 joint venture to develop, build and operate the planned 520 km Trans Adriatic Pipeline (TAP), intended to provide a route for the Caspian and later, the Mideast gas to Europe, Energy Intelligence Group writes.
Until now a 100% EGL project, 520km-long TAP aims to transport gas via Greece and Albania to southeast Italy. It includes a 115 km subsea section from Albania to Italy.
EGL said the line would cost an estimated 1.5 billion ($2.2 billion) and is subject to a final investment decision in the second half of 2009. Its planned initial capacity is 10 Bcm/yr, operational from 2011at the earliest, with the option to expand to 20 Bcm/yr.
Statoil's significance is as the owner of a 25.5% stake in the Shah Deniz field in Azerbaijan. Statoil is also the commercial operator of the South Caucasus Pipeline, the pipe taking Shah Deniz gas to Turkey via Georgia.
The parties involved in the Shah Deniz production sharing agreement (PSA) which was signed on 4 June 1996 are: BP (operator - 25.5%), StatoilHydro (25.5%), the State Oil Company of Azerbaijan Republic (SOCAR - 10%), LUKOIL (10%), NICO (10%), Total (10%), and TPAO (9%).
Gas production from Shah Deniz commenced in December 2006. The gas produced in the field is delivered to Georgia and Turkey via the South Caucasus Pipeline. 8.8 bln cu m of gas will be produced per year within Phase 1 of the Shah Deniz field development project. This volume will be sold to Azerbaijan, Georgia and Turkey. Realizing of the second stage from 2012 will increase gas production up to 20 bln cu m which will be exported to European countries.