Baku, Azerbaijan, March 15
By Azad Hasanli - Trend:
Net financial needs of the Southern Gas Corridor (SGC) CJSC for operations and capital expenditure will be close to $2.2 billion in 2018-2019 taking into account proceeds from the operation of Shah Deniz field and South Caucasus Pipeline, Fitch Ratings, the international rating agency, said in its report.
Fitch expects SGC to raise loans from development institutions and tap debt capital markets for funding in the medium term.
In 2017, SGC also secured direct financing of its stakes in the projects from the following international financial institutions: $0.4 billion from IBRD (International Bank for Reconstruction and Development, part of World Bank group), $0.6 billion from Asian Infrastructure and Investment Bank, $1 billion from Asian Development Bank, $0.5 billion from European Bank for Reconstruction and Development, all of which were fully guaranteed by the Republic of Azerbaijan, according to the report.
The Southern Gas Corridor is one of the priority projects for the EU and provides for the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.
At an initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.
As part of the Shah Deniz Stage 2, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).