Azerbaijan, Baku, April 3 / Trend S. Agayeva /
An Azerbaijani-Ukrainian working group on energy issues will hold meetings until late May to assess the economic profitability of the project of supplying Azerbaijani gas to Ukraine, Ukrainian Ambassador to Azerbaijan Alexander Mishchenko said at a press conference today.
The agreement was reached during Ukrainian Minister of Energy and Coal Industry Eduard Stavitsky's recent visit to Azerbaijan.
Azerbaijani gas supplies from Shah Deniz offshore gas condensate field to Europe will begin in 2019. Azerbaijan proposed Ukraine to ensure gas supplies through the Trans-Anatolian pipeline or by constructing a terminal on its liquation in Georgia and transshipment through the LNG-terminal in Ukraine. This project must allow Ukraine to diversify gas supplies.
Ukraine proposes Azerbaijan to refine oil at its refineries upon a toll manufacturing system. It is planned to refine it at the refineries in Odessa and Kremenchug.
"The Azerbaijani side must determine the gas volumes to be produced each year to calculate the components of shipping and transportation," he said. "Afterwards, we will come to some agreement."
He added that Ukraine is planning to build the LNG-terminal in Odessa.
"Ukraine is ready to consider its participation in the development of infrastructure projects on energy supplies to Europe, in particular, in such a project as AGRI, for gas supply from Azerbaijan or from any other source," he said. "We are building an own terminal and we will look for a source. If Azerbaijan is ready to cooperate in this area, we appreciate this."
The project of the LNG-terminal construction is open for participation in case of the Azerbaijani side's desire, the ambassador said.
The oil supplies from Azerbaijan for processing in Ukraine hit 10 million tons in 2010.
"However, our companies came to the conclusion that these supplies are too costly," he said. "This is unprofitable. Now we have to count everything. The experts are discussing further cooperation in the energy field."
The final decision will depend on the energy ministers of the two countries. The reports of the experts' work will be submitted to them.
"The energy cooperation between the two countries has been well established," Mishchenko said. "Currently, SOCAR has more than 30 filling stations in Ukraine and we are pleased with its work."
Earlier, Vladislav Kaskiv, head of Ukraine's state investment agency, said that a rent of a floating platform for the LNG-terminal will cost Ukraine $ 60 million a year. According to the sources at the Ukrainian Energy Ministry, the investments made in transshipment infrastructure in Georgia and purchase of a tanker fleet are estimated at $3.7 billion.
Azerbaijan plans to export 10 billion cubic meters of gas a year to Europe within the second stage of development of Shah Deniz field.
First gas production within Shah Deniz-2 project is expected for 2018.
Two offshore platforms will be installed and more than 20 subsea wells will be drilled for the production of an additional 16 billion cubic meters of gas a year under the Shah Deniz-2. It is predicted that gas production can be brought up to 24 billion cubic meters a year in the second stage of field development.
Gas reserves of Shah Deniz field are estimated at 1.2 trillion cubic meters.
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 percent.