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Ukraine is new competitor of South Gas Corridor

Oil&Gas Materials 28 June 2010 10:53
Azerbaijan becomes a more important player on the global energy market. The country, has already acquired the status of one of the largest exporters of gas in the Caspian region, is today regarded as a major fuel supplier for a number of European pipeline projects.
Ukraine is new competitor of South Gas Corridor

Azerbaijan, Baku, June 19 / Trend A. Badalova /

Azerbaijan becomes a more important player on the global energy market. The country, has already acquired the status of one of the largest exporters of gas in the Caspian region, is today regarded as a major fuel supplier for a number of European pipeline projects.

Now Azerbaijan exports gas to Russia, Georgia, Iran and Turkey. But the European market remains the priority for exports. Such European countries as Greece, Bulgaria, Romania, Italy show interest to buy Azerbaijani gas. But investment decisions have not been adopted yet on the projects that would connect Azerbaijani gas with European market. It is an obstacle for concluding the gas contract with the shareholders of these projects.

These pipeline projects within the Southern Corridor as Nabucco, ITGI (gas pipeline Turkey-Greece-Italy), TAP (Trans-Adriatic pipeline) and White Stream count on Azerbaijani gas worth 8-10 billion cubic meters a year each.

Azerbaijan has repeatedly stated that it is interested in exporting its gas to European market. Nevertheless, it is obvious that only Azerbaijani gas is not enough for all these projects.

Demand for Azerbaijani gas increases every day. The number of pretenders increases. Ukraine is among the last of them. It has recently announced that it intends to buy 10 billion cubic meters of Azerbaijani gas per year within the project of liquefied natural gas via the Black Sea to Romania and Bulgaria.

This project is new for Azerbaijan. It has considerable interest for the country. The project of supplies of liquefied Azerbaijani gas to Romania envisages the construction of two terminals for liquefied gas - one in Georgia, the other one - in Romania.

The project is considered in two directions - LNG and CNG. First one is the construction of gas liquefaction plant, and the second - delivery of gas directly to the ship for its compression. This project deals with about 7-20 billion cubic meters of gas.

Realization of this project can leave the projects within the Southern Corridor without gas. According to U.S Energy Security Analysis (ESAI) analyst Andrew Reed, planned projects can not be realized with only Azerbaijani gas.

"Many of these projects are progressing, but I presume they can only come to fruition if and when Turkmenistan exports gas through Azerbaijan," Reed told Trend via e-mail.

Until then it is difficult to imagine any projects being implemented until there is an opportunity to transport Turkmen gas, Reed said.

He said that the exception is the project of exporting gas from the Azerbaijani Shah Deniz field to and through Turkey. It became possible after signing of a package of gas agreements between Azerbaijan and Turkey in June.

According to BP, the proven gas reserves of Azerbaijan in early 2010 totaled 1.31 trillion cubic meters. According to BP, gas production in the country in 2009 totaled 14.8 billion cubic meters, which is 0.2 percent more compared to 2008.

Developed Azerbaijani Shah Deniz field is one of the largest one in the world.

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

It is expected that gas from the second stage of the field, realization of which is scheduled for 2016-2017, will form the basis for filling gas pipelines within the Southern Corridor - Nabucco, ITGI, White Stream and TAP.

A peak production from the field within the first stage of development is projected at 8,6-9 billion cubic meters. According to the forecasts, gas production will be increased by another 16 billion cubic meters per year within the second stage of development of the field.

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