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Why Southern Gas Corridor is win-win project for Europe, Turkey and Azerbaijan?

Oil&Gas Materials 2 December 2019 10:40 (UTC +04:00)
Why Southern Gas Corridor is win-win project for Europe, Turkey and Azerbaijan?

BAKU, Azerbaijan, Dec.2

By Leman Zeynalova – Trend:

The Southern Gas Corridor (SGC) is a win-win project for Azerbaijan, Turkey and the European Union (EU), Francis Perrin, Senior Fellow at the Policy Center for the New South (PCNS, Rabat) and at the French Institute for International and Strategic Affairs (IRIS, Paris) told Trend.

He made the remark on the occasion of opening of Phase 1 of the Trans Anatolian Natural Gas Pipeline (TANAP), which is the longest part of the Southern Gas Corridor.

“TANAP is part of a broader project called the Southern Gas Corridor (SGC). Its aim is to supply the European Union and Turkey with natural gas produced in the Caspian Sea region, in this case from the Shah Deniz offshore gas field in Azerbaijan. The total length of the SGC is 3,500 kilometers, of which 1,850 km for TANAP whose investment cost is estimated at about $7 billion. The connection between TANAP and Europe is an important new step towards the completion of the SGC, which also includes the South Caucasus Pipeline and the Trans-Adriatic Pipeline (TAP). It confirms that gas from Azerbaijan will flow to Europe on a commercial basis next year as forecast, probably in October 2020. TANAP's initial capacity is 16 billion cubic meters per year, of which 6 billion for Turkey and 10 billion for the European Union. TAP (878 km) will link Greece, Albania, the Adriatic Sea and Italy. At the end of October 2019 its completion rate was 90 percent,” he said.

Perrin noted that with SGC, Azerbaijan will increase its gas exports and its gas revenues and will get access for the first time to the EU market, which is a key objective for the authorities of this country and for the national company SOCAR.

“This gas link with the EU is very important for Azerbaijan for energy, economic and geopolitical reasons. Turkey will increase and diversify its gas imports and get transit revenues. The SGC is also important for Turkey in geopolitical terms as it will increase the role of this country in the diversification of European gas supplies. For the EU, the SGC means the access for the first time to Caspian gas supplies, which is a way to diversify its gas imports,” said the expert.

As Perrin noted, the SGC is a key part of broader energy links between the Caspian Sea region, Azerbaijan in fact, and Turkey and the EU.

“The other parts, which are already operational for several years, are the Baku-Tbilisi-Ceyhan oil pipeline (BTC) and the Baku-Tbilisi-Erzurum gas pipeline project. Future developments could include the Trans-Caspian Gas Pipeline, which would allow Turkmen gas to reach Europe through the Caspian Sea and Azerbaijan,” added the expert.

The opening ceremony of the TANAP-Europe connection was held on Nov. 30, 2019 in Ipsala, Edirne province of Turkey.

In this area, near the Greek border, TANAP is connected to the Trans-Adriatic Pipeline (TAP), through which natural gas from Azerbaijan will be delivered to European countries.

Opening ceremony of TANAP's Phase 0 took place on June 12, 2018, in the Turkish province of Eskisehir, and commercial gas deliveries to Turkey began in late June 2018.

The volume of gas transportation to Turkey via TANAP has reached 3.08 billion cubic meters (bcm) since the start of commercial gas supplies on June 30, 2018 as of late October 2019.

The initial capacity of TANAP, which is the main segment of the Southern Gas Corridor, is 16 billion cubic meters of gas.

Around six billion cubic meters of this gas will be supplied to Turkey while the remaining volume - to Europe. After the completion of the Trans Adriatic Pipeline (TAP) construction, gas will be supplied to Europe in early 2020.

The share distribution of TANAP shareholders is as follows: Southern Gas Corridor CJSC - 51 percent, SOCAR Turkey Enerji - 7 percent, Botas - 30 percent, BP - 12 percent.

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Follow the author on Twitter: @Lyaman_Zeyn

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