When will Southern Gas Corridor more than double its capacity?

Oil&Gas Materials 28 July 2020 13:06 (UTC +04:00)
When will Southern Gas Corridor more than double its capacity?

BAKU, Azerbaijan, July 28

By Leman Zeynalova - Trend:

Although the potential for the expansion of the Southern Gas Corridor’s capacity exists, it is highly unlikely that such an expansion will more than double its existing 10 bcm/year transit capacity before the early 2030s, Trend reports with reference to the the book titled “The Southern Gas Corridor and its importance for South-East Europe”.

Moreover, the authors believe that most of future additional supplies during the 2020s are more likely to come from Azerbaijani gas fields rather than new sources of supply such as Iran, Iraq, Turkmenistan or for that matter the Eastern Med.

“The SGC volumes would need to triple or quadruple to around 40 bcm/y and beyond for the region to emerge as a serious alternative to Russian gas exports to the EU, as the Union is also supporting the evolution of new supply Corridors from the Eastern Mediterranean that will operate independently from the SGC either through a combination of new regional pipelines and existing LNG liquefaction facilities in Egypt or through the construction of a major dedicated pipeline such as the ambitions East Med Gas Pipeline project,” reads the book.

The authors point out that at least in its original phase to 2025, the SGC will not rise to the same level of significance as Algeria or Norway.

“Since 2013, when TAP was selected as the main export option for Azeri gas to the EU, Norwegian and Algerian exports have also increased without being able to balance off the steady expansion of Russian gas exports over the last five years. Algeria and Norway remain the two principal alternative corridors that supplement Russia’s indispensable position as the core gas supplier to the EU,” 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.


Follow the author on Twitter: @Lyaman_Zeyn