Shah Deniz expect support of TAP gas pipeline by Greece and Italy

Azerbaijan, Baku, Feb.27 /Trend E.Ismayilov/

The consortium of project to develop Shah Deniz, the Azerbaijani offshore gas condensate field, counts on the support of the Trans-Gas Pipeline (TAP) project by Italian and Greek governments, senior official of State Oil Company of Azerbaijan (SOCAR) told Trend.

SOCAR leads a group of companies engaged in the choice of variant of gas export from Shah Deniz. The group also includes BP, Statoil and Total.

Previously ITGI (Interconnector Turkey-Greece-Italy) gas pipeline project was also considered as a possible gas pipeline that will supply Azeri gas to the Italian direction. However, the partners on Shah Deniz said that the ITGI is no longer considered as a project to bring Azeri gas to European markets.

TAP project is a priority route for a possible gas exports to Italy by the decision of the consortium Shah Deniz. Negotiations with TAP will continue, along with other projects to Central Europe under consideration.

SOCAR noted that two routes in the direction of Italy were considered - ITGI and TAP. The consortium "Shah Deniz" negotiated with all the transport projects. Commercial, legal, transportation and technological aspects were studied during the negotiation.
"It was concluded as a result that TAP is more promising or the most feasible option from the two options in the direction of Italy," the representative of SOCAR said.

The source said the choice was made for many reasons. Among them is that TAP consortium consists of three large and powerful, with technical, commercial and financial points of view, European companies - Statoil, EGL and E.ON Rurgas.

SOCAR supported TAP project when Statoil applied for its participation in the project, the representative of SOCAR said. This decision was due to the opportunities to study the project in detail.

Also, the three companies mentioned do not have problems in financing the project, as well as in terms of technical aspects of the pipeline, the source said.

Regarding ITGI project, the source stressed that at present the company DEPA and Edison were not sufficiently stable, as the Greek DEPA should be privatized and has financial problems. Despite the fact that the Italian Edison is quite big and serious company, it also has financial problems.

"In this regard, there is instability and risks. There is also a risk with the possible laying of South Stream pipeline" the representative of SOCAR said.
The only advantage of ITGI is a support of Italian and Greek governments. The reason for support was that this project involves the Greek and Italian companies. The consortium "Shah Deniz" and SOCAR consider this project not as an Italian or Greek, but as a technical project to deliver gas to Greece and Italy.

"If there isn't ITGI project, Greek and Italian governments, from our point of view, but also in terms of the consortium Shah Deniz, should support more acceptable pipeline, which will deliver gas to Italy and Greece. It is not the question of Italian and Greek companies supported, but support of a more serious, probable and practical pipeline. TAP was selected in this regard, and now we are counting on the fact that the Greek and Italian governments will support the pipeline" the representative of SOCAR said.

Referring to the fact that the choice of TAP as one of the possible projects fall on this period, the representative of SOCAR said it is due to the fact that before making a final investment decision the consortium of Shah Deniz need to make sure that the both Governments will provide the necessary support to TAP pipeline and all permits, assurances will be issued to it in order to build the pipeline to the beginning of gas production in 2017.

The consortium of Shah Deniz is currently considering three possible export route - the Nabucco pipeline South-Eastern Europe (SEEP) and the Trans Adriatic Pipeline (TAP).
Gas reserves of Shah Deniz field are estimated at 1.2 trillion cubic meters.
Most of the gas, which will be produced in the second stage of Shah Deniz field development is planned to deliver to Europe. Azerbaijan plans to export ten billion cubic meters of gas to Europe annually.

The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 per cent, Statoil - 25.5 per cent, NICO - 10 per cent, Total - 10 per cent, LukAgip - 10 per cent, TPAO - nine per cent and SOCAR-10 per cent.

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