TANAP delivers option for Azerbaijan and Turkey

Oil&Gas Materials 31 January 2012 18:48 (UTC +04:00)

Azerbaijan, Baku, Jan. 31 / Trend /

Trend news agency expert Seymur Aliyev

As the period when Azerbaijan will choose one of the routes for its gas supplies to Europe approaches, some projects participating in the competition, lose their benefits, while others, conversely, get them. But new proposals, including Trans-Anatolia Gas Pipeline (TANAP) and South East Europe Pipeline (SEEP) amid the long discussed routes have great importance.

This is confirmed by the statement of representatives of the Turkish Ministry of Energy and Natural Resources that the country does not fully support for "Nabucco" gas pipeline and makes TANAP project as a priority.

Turkey's decision explained by the financial component amid all other statements in relation to this project can make "Nabucco" more compliant and offer the best conditions for gas transportation and reduce the cost of the project implementation through a phased capacity expansion.

Today, Azerbaijan is most real gas supplier within the "Southern Gas Corridor" (which includes Nabucco, ITGI, TAP gas pipelines). It is ready to transport about 10 billion cubic meters of gas via this route.

Therefore, the country sees no need to supply gas through the gas pipeline with a capacity of 31 billion cubic meters per year. First of all, this is stipulated by the inefficiency of the transportation tariff as the supplier will have to pay for unfilled capacity.

This was also confirmed by Turkish Energy Minister Taner Yildiz. He said that 'Southern Gas Corridor' participants must reconsider transportation routes and tariffs during TANAP construction.

However, TANAP capacity may hit 30 billion cubic meters. It is not excluded that this volume will be achieved through gradual expansion and designed not only for natural gas from Azerbaijani field "Shah Deniz".

Such large gas fields as "Absheron" and "Umid" have been recently discovered in Azerbaijan. Deep gas is expected to be obtained from the block of fields "Azeri-Chirag-Guneshli" in the future. Turkmen gas can be transported via Azerbaijan and Turkey to Europe. A powerful gas pipeline is required on Turkish territory (in the future on the territory of Azerbaijan and Georgia) to transport these volumes of gas.

Previously, a gas pipeline was planned to be constructed in Turkey as part of the "Nabucco" project. It would allow it to reserve increasing gas volumes in Azerbaijan and prospective gas from Turkmenistan for its route. However, TANAP construction will allow Azerbaijan and Turkey to choose routes for gas transportation and not to limit to one project of gas supplies to Europe. First of all, this corresponds to the diversification policy and maximum profit from the gas supply to various markets.

The Nabucco project is intended to transport natural gas from the Caspian region and Middle East to the EU. Its construction is scheduled to begin in 2013 with commissioning in 2017. Its maximum capacity is 31 billion cubic meters per year. Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE are the participants in Nabucco.

Earlier, Azerbaijan and Turkey signed a memorandum of understanding to establish a consortium that will build a gas pipeline to supply gas from the "Shah Deniz" field in Europe through the Turkish territory.

TANAP gas pipeline construction is necessary to export most of 50 billion cubic meters of gas that Azerbaijan intends to extract by 2025.

The project participants plan to resolve all issues on this gas pipeline in 2012 and begin construction for the project to be implemented by late 2017 when the implementation of the second stage of "Shah Deniz" field development is launched. The gas pipeline will be the basis for the Southern Gas Corridor.