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Additional uncontracted gas for Southern Gas Corridor will be available from 2023

Oil&Gas Materials 28 July 2020 12:55
Additional uncontracted gas for Southern Gas Corridor will be available from 2023

BAKU, Azerbaijan, July 28

By Leman Zeynalova - Trend:

Additional uncontracted gas for the Southern Gas Corridor will be available from 2023, Trend reports with reference to the the book titled “The Southern Gas Corridor and its importance for South-East Europe”.

“The Southern Gas Corridor’s mid-stream segments are scalable enough to export up to 30 bcm/year if and when the gas is available. However, the additional uncontracted volumes of gas will be available from 2023 only, when Umid will increase its production 6 times, the production from Bulla will be quadrupled and Garabagh and Babek fields start producing gas, in total around 7 bcm/year, according to Azneft data. Till then, the costly TANAP infrastructure will be operating on half capacity,” reads the book.

The authors point out that as the Trans Adriatic Pipeline (TAP), the final leg of the Southern Gas Corridor, is European infrastructure, any decision to expand the capacity should be in compliance with the EU legislation.

“The decision will also largely depend on the economics of such investments and availability of markets and the price. With a maximum 10 bcm/year of gas surplus it will not be possible to fill the infrastructure fully and make it commercially viable. The availability of additional volumes of gas will also depend on the future investments in technical resources that were described above. Turkmen gas might be another option for filling the pipelines,” reads the book.

The Southern Gas Corridor comprises the following four projects: (i) operation of Shah Deniz natural gas-condensate field ("SD1" project) and its full-field development ("SD2'" project), (ii) the operation of the South Caucasus Pipeline ("SCP" project) and its expansion ("SCPX" project), (iii) the construction of the Trans-Anatolian Natural Gas Pipeline ("TANAP" project) and (iv) the construction of the Trans Adriatic Pipeline ("TAP" project) (SD2, SCPX, TANAP and TAP collectively, the "Projects").

The Projects have an estimated investment cost of approximately $40 billion. Upon completion, the SD2 project will add a further 16 bcm of natural gas per annum to 10.9 bcma (maximum production capacity) already produced under SD1 project.

Total length of the newly constructed SCPX, TANAP and TAP pipelines will be more than 3,200 kilometres.

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Follow the author on Twitter: @Lyaman_Zeyn

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