Shah Deniz 2 project to provide serious flow of investments to Azerbaijani economy
Azerbaijan, Baku, Oct 5 /Trend E.Ismayilov/
The second stage of the Shah Deniz Azerbaijani gas condensate field's development project and provision of gas supply from Azerbaijan to Europe will require investments to the sum of a minimum $40-45 billion, a high ranking SOCAR representative told Trend.
"Gas production and construction of the necessary pipeline infrastructure will require around $40-45 billion," the source noted.
The representative said some $25 billion will be needed for the realisation of Shah Deniz's second development stage, construction of platforms, drilling works and extension of the Sangachal terminal.
Although the second realisation stage of Shah Deniz and supply of Azerbaijani gas to Europe are costly, this project will provide a flow of foreign investment.
Project realisation can turn into a second investment boom in the Azerbaijani oil sector after the Azeri Chirag Guneshli oil and gas field development project. According to the data, as of August 1, $28.67 billion had been contributed to this development project in the Azerbaijani sector of Caspian Sea to date.
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.
Gas reserves of Shah Deniz field are estimated at 1.2 trillion cubic meters. It is predicted that in the second stage of field development, gas production can be brought up to 24 billion cubic meters a year.
Gas which will be produced during the second phase of the field development is considered as the main source for the Southern gas corridor projects and in particular Nabucco West and TAP (Trans Adriatic Pipeline). Azerbaijan plans to export 10 billion cubic metres of gas per year to Europe as part of the second phase of the Shah Deniz field development.