South Stream has never been priority for European Union

Oil&Gas Materials 2 December 2014 21:28 (UTC +04:00)

Baku, Azerbaijan, Dec.2
By Aygun Badalova, Azad Hasanli - Trend:

Southern Gas Corridor is a priority project for the European Union, unlike the South Stream project, which has never been priority one, the head of the Azerbaijani representation of the EU Malena Mard told Trend Dec.2.

On December 1, Russian President Vladimir Putin during the talks in Turkey said that in the current circumstances, Russia cannot continue the implementation of the South Stream, which involved the supply of Russian gas to the European market, due to the non-constructive position of the European Union as well. He said that Russia intends to build a new gas transportation system to Turkey, creating a gas hub on its border with Greece.

"South Stream has never been a priority for the EU," said Mard. "As we have repeatedly stated, Southern Gas Corridor is a priority project for the EU. It is also important for us that this corridor would have the opportunity to expand, as we want larger volumes of gas to be transported through it in the future."

The Southern Gas Corridor will allow Europe to diversify its hydrocarbon supply sources and strengthen energy security and also will allow Azerbaijan to obtain a new market in Europe.

Mard also said that the EU continues tripartite dialogue with Azerbaijan and Turkmenistan. "It is important for us that the gas would be transported through the Southern Gas Corridor not only from Azerbaijan, but also from other countries of the Caspian region," she said.

The construction of a 300-kilometer gas pipeline under the Caspian Sea to the coast of Azerbaijan is regarded as the best option for ensuring the delivery of Turkmen energy resources to European market.

Further, Turkmen hydrocarbons can be delivered to Turkey which borders the European countries.

Mard added that Azerbaijan has great potential not only in terms of the current volume of gas, but also in terms of the future volumes that are naturally very important for EU.

On December 17, 2013, a final investment decision was made on the Stage 2 of the Shah Deniz offshore gas and condensate field's development. Around 10 billion cubic meters of the total volume of gas to be produced at this field will go to the European market.

The gas to be produced as part of the Stage 2 of the field's development will be exported to Turkey and to the European markets by means of expanding the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP) which are a part of the Southern Gas Corridor project alongside with Shah Deniz-2. The cost of the work on all four elements of this corridor is estimated at almost $50 billion, according to the preliminary data.

The contract for development of the Shah Deniz offshore field, which has proven reserve of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

The shareholders are: SOCAR (16.7 percent), BP, operator (28.8 percent), Statoil (15.5 percent), NICO (10 percent), Total (10 percent), Lukoil (10 percent) and TPAO (9 percent).

For any questions or feedback, follow the authors on Twitter:@AzadHasanli, @AygunBadalova