Status of Southern Gas Corridor projects for 2020

Oil&Gas Materials 29 December 2020 13:05 (UTC +04:00)

BAKU, Azerbaijan, Dec.29

By Leman Zeynalova - Trend:

Southern Gas Corridor (SGC) project initiated by Azerbaijan, is one of the priority projects for the European Union (EU). It envisages transportation of gas from the Caspian Sea region to European countries through Georgia and Turkey.

This large-scale project is aimed at diversification of energy supply routes and sources, thereby contributing to strengthening Europe’s energy security. SGC project will for the first time in the history ensure the supply of Caspian gas resources to European markets.

All segments of the Southern Gas Corridor have been completed. The project’s cost totaled $33 billion, as compared to the forecast $45 billion. Capital expenditures on the SGC project are expected to be fully reimbursed within 8-10 years.

Trans-Anatolian Natural Gas Pipeline (TANAP)

TANAP project envisages transportation of gas from Stage 2 of Azerbaijan’s Shah Deniz field from Georgian-Turkish border to Turkey’s western border. The total cost of TANAP turned out to be lower than $7 billion.

The initial capacity of TANAP is expected to stand at 16 billion cubic meters of gas per year, with possibility of expanding to 31 billion cubic meters per year in the future. Around 6 billion cubic meters of gas will be delivered to Turkey, while the rest of the volume will be supplied to Europe.

TANAP shareholders are as follows: Southern Gas Corridor CJSC – 51 percent, SOCAR Turkey Enerji – 7 percent, BOTAS – 30 percent and BP – 12 percent.

Line fill began in the TANAP pipeline across Turkey in late January 2018.

A ceremony to launch Phase 0 of TANAP took place June 12, 2018 in the Turkish city of Eskisehir. First commercial gas deliveries to Turkey commenced on June 30, 2018. The opening ceremony of TANAP’s connecting with Europe took place on Nov. 30, 2019 in Ipsala town (Edirne province, Turkey).

The design capacity is 31 billion cubic meters of gas per year, and the initial capacity of the pipeline is 16 billion cubic meters per year.

For expansion, it is necessary to add several additional compressor stations in order to achieve throughput of 24 billion cubic meters per year. To achieve capacity of 31 billion cubic meters, a total of seven compressor stations will be required.

Project status

The global economic and social crises do not cause any delays in TANAP’s commercial operation, since under the 15-year gas transportation agreements with predetermined volume of transportation and tariffs, a constant transport income is guaranteed every year.

The volume of gas supply from the Trans Anatolian Natural Gas Pipeline to Turkey has reached 8.2 billion cubic meters from July 2018 till Dec.16, 2020.

TANAP’s throughput capacity will rise to 12.2 billion cubic meters, including the gas to be delivered to Turkey and in 2022, TANAP will reach its full capacity of 16 billion cubic meters.

In July 2020, the Trans Anatolian Natural Gas Pipeline reached the maximum level of daily gas flow. TANAP started with a daily gas flow of 4.7 million cubic meters on 30 June 2018. This volume started to increase gradually. On 1 July 2019, it reached 11.3 million cubic meters and on July 1, 2020, it reached the maximum level with 17 million cubic meters.

In July 2020, the European Investment Bank (EIB) disbursed $270 million worth loan to Turkey’s BOTAS Petroleum Pipeline Corporation for the Trans Anatolian Natural Gas Pipeline.

The funds were allocated in accordance with the loan agreement signed back on December 20, 2018. The loan has a final maturity of 18 years with 5 years grace period.

Test gas supplies from Azerbaijan’s Shah Deniz 2 to Europe started via the Trans Anatolian Natural Gas Pipeline in September 2020.

Trans Adriatic Pipeline (TAP)

TAP project envisages transportation of gas from Azerbaijan's Shah Deniz Stage 2 to the EU countries. TAP is 878 kilometers in length (Greece 550 kilometers, Albania 215 kilometers, Adriatic Sea 105 kilometers, and Italy 8 kilometers).

The initial capacity of TAP will be 10 billion cubic meters per year with the possibility of expanding to 20 billion cubic meters.

TAP’s shareholding is comprised of BP (20 percent), Azerbaijan’s state oil company SOCAR (20 percent), Snam S.p.A. (20 percent), Fluxys (19 percent), Enagás (16 percent) and Axpo (5 percent).

TAP can also ensure gas supply to several countries in South-East Europe, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and other countries by connecting to the Ionian Adriatic Pipeline (IAP).

Bulgaria can receive gas via the Interconnector Greece-Bulgaria (IGB).

Some large European markets, such as Germany, France, UK, Switzerland and Austria can receive gas from Italy, which is the end point of TAP.

Project status

In February 2020, Italy’s Snam company and Azerbaijan’s state oil company SOCAR signed a cooperation agreement to study the development of renewable gases and use of sustainable energy, with a view to their delivery through the Southern Gas Corridor including Trans Adriatic Pipeline in the future.

On March 31, 2020, PRISMA European Capacity Platform GmbH and Trans Adriatic Pipeline (TAP) AG signed an agreement that will open up TAP´s future transportation capacity marketing activities on the PRISMA platform, where transmission system operators, storage system operators and shippers market gas capacity at both primary and secondary market levels.

In May 2020, The Trans Adriatic Pipeline consortium filled the last part of the pipeline’s Greek section with gas. This part of the Greek section runs from Serres to Ieropigi (Kastoria) to the Greek-Albanian borders. The test operation process inspects the safety of the infrastructure according to national and international standards.

The Trans Adriatic Pipeline AG started to introduce the first natural gas into a 4 km section of the pipeline in Albania, between the Greek – Albanian border and up to the TAP metering station in Bilisht on May 20.

On May 27, 2020, the consortium for construction of the Trans Adriatic Pipeline received an Independent Natural Gas System Management License for the pipeline’s Greek section.

This section of the pipeline starts from the area of ​​Kipi near the Greek-Turkish border, crosses the prefectures of Evros, Rodopi, Xanthi, Kavala, Serres, Thessaloniki, Pella, Imathia, Kozani and Kastoria and ends at the border of Greece with Albania, southwest of Ieropigi.

In June 2020, the Trans Adriatic Pipeline consortium announced changes to the timing of the market test,.

The three transmission system operators – Trans Adriatic Pipeline (TAP) AG, Snam Rete Gas (SRG) and DESFA (hereinafter collectively referred to as the TSOs) – announced that the binding bidding phase of the ongoing market test would take place in July 2021.

The joint consultation on the draft project proposal published on 20 January 2020 provided an indicative timing (January 2021) for the binding bidding phase.

Given the recent market conditions, the TSOs decided to allow more time for energy markets to recover.

In June 2020, Trans Adriatic Pipeline AG successfully completed the 105 km long offshore section of the pipeline across the Adriatic Sea. This milestone includes several deliverables, such as the offshore installation of 36-inch pipes by Castoro Sei, Saipem’s semi-submersible pipelaying vessel, the above-water-tie-in with the onshore infrastructure in Albanian waters, as well as hydrotesting the asset to ensure it is safe and ready for operations.

Activities to connect the Italian and Albanian coasts began in mid-January 2020, with pipes being welded and tested on board Castoro Sei and then laid onto the bottom of the Adriatic Sea in a continuous stretch, starting from the Italian shores towards Albania.

Approximately 9,000 pipes of 36-inch diameter have been used for TAP’s offshore section, weighing circa 100,000 tonnes in total. The pipes have been laid on the Adriatic seabed: 25 km in Italian territorial waters, 43 km in international waters and 37 km in Albanian territorial waters.

The deepest point of the pipeline is approximately 810 metres beneath sea level. Saipem’s Castoro Sei laid an average of 1.2 km pipes per day, reaching a peak of 2.8 km in a single day.

In July 2020, Management Code of the Trans Adriatic Pipeline was approved in accordance with the joint decision of the Regulatory Authorities of Greece, Italy and Albania, Trend reports with reference to the decision posted on Greek Regulatory Energy Authority’s (RAE) platform.

The draft Code was put up for public consultation from August 7 to September 18, 2018, which was extended until September 30, 2018.

Comments were received from nine participants, six companies participating in the gas market, two industry associations, and the Energy Community Secretariat.

The offshore bio-constructions temporarily moved in October 2019 as part of construction of the Trans Adriatic Pipeline (TAP) are now back to their original location, on top of the pipeline.

The Ministry of Environment, with the aim to protect the cores of bio-construction potentially affected by the pipeline, requested the temporary moving of bio-constructions during offshore works.

The moving activities were carried out by specialized divers and coordinated by biologists in real time. The detached core pieces of bio-constructions were temporarily stored on metal support systems.

In July 2020, the last weld in the Trans Adriatic Pipeline was completed. This means that 878 kilometers are now joined, from the Trans Anatolian Natural Gas Pipeline (TANAP) through to the Pipeline Receiving Terminal in Italy.

The Trans Adriatic Pipeline AG consortium issued the invitation to tender for ‘Supply of Gas for Operational Purposes’ to qualifying bidders on July 13, 2020.

TAP AG launched an Invitation to Tender (ITT) for the purchase of gas required for operational activities, including the fuelling of the compressor stations. This tender is being conducted in preparation for the start of the commercial operations phase, scheduled for the fourth quarter of 2020.

The Trans Adriatic Pipeline AG consortium issued its Network Code, as approved by the national energy regulatory authorities of Greece, Albania and Italy.

The TAP Network Code has been finalized following the public consultation launched in August 2018, and sets out rules that govern TAP’s services to customers, including shipper registration, credit support, capacity products offered, capacity booking, balancing, usage costs, etc.

The shippers’ registration process opened on 10 August 2020.

The Trans Adriatic Pipeline consortium will carry out a market test at least every two years to assess interest in expansion of the capacity in TAP through long-term capacity booking.

Trans Adriatic Pipeline offers the following capacity products: forward firm capacity, forward interruptible capacity and commercial reverse capacity.

Forward firm long-term capacity will only be made available through TAP’s market tests.

TAP offers forward day-ahead interruptible capacity at an interconnection point only when there is no available capacity for forward firm capacity at that particular interconnection point.

TAP offers commercial reverse capacity that results in an eastward (virtual) flow, according to each commercial reverse route.

TAP does not offer physical reverse flow as a commercial product. This will only be provided for emergency operations in accordance with TAP’s regulatory framework.

Registered parties and shippers can book capacity through auctions held on the PRISMA capacity booking platform.

Available capacity is offered according to the ENTSOG auction calendar.

In case the PRISMA platform is unavailable, TAP will allow capacity booking through the activation of the back-up capacity allocation process.

In November 2020, DESFA, Greece’s National Natural Gas System, announced the first auction for natural gas for 2021 at the new interconnection point of the National Natural Gas System with that TAP pipeline.

In view of the start-up of the Trans Adriatic Pipeline soon, Italian Regulatory Authority for Electricity Gas and Water (ARERA) jointly with the Greek Regulatory Authority for Energy (RAE) approved the capacity allocation rules in November 2020.

The Trans Adriatic Pipeline consortium has started replanting the olive trees temporarily moved during construction works, back to their original locations.

The trees cut down due to being infected by Xylella will be replaced by young olive trees resistant to the bacterium.

Four and a half years after the inauguration of construction works in Thessaloniki, the Trans Adriatic Pipeline (TAP), an 878-km gas transportation system crossing Greece, Albania, the Adriatic Sea and Italy, became ready for commercial operations on Nov.15.

Approximately 55,000 pipes have been used to build the pipeline, weighing circa 520,000 tonnes or the equivalent of 71 Eiffel towers. The pipes were transported to TAP’s main marshalling yards in 79 sea vessel shipments and 158 block trains within Greece. From the main marshalling yards, the pipes were transported further to the local pipe yards near the construction sites along the pipeline route.

Laying steel pipes beneath the Adriatic Sea at depths of more than 800 metres, with a duty of care to the environment, is no easy feat. TAP contracted industry leader Saipem to lay the pipe-string on the seabed, using a specialist semi-submersible vessel.

In February 2018, near the Greek village of Elaiousa, TAP completed one of the longest thrust bores of its type: an 1,820 metre horizontal directional drill beneath the Axios river.

Drilling and reaming (widening of bore holes) operations took place between November 2017 and February 2018, using a 400-tonne rig with reaming tools designed specifically to minimise rotation and pull forces.

TAP’s contractors and their engineers constructed a pipe section, comprising 1.2 metre diameter pipes, and accommodated the welded pipe stretch all in one go. To add to the challenge, the team was required to build this pipe-string along a curved section of the pipeline’s right of way, within a floatation trench, passing below a provincial road.

The controlled installation process took 36 hours and was completed with zero impact on either local communities or the environment.

At the pipeline’s highest point in Albania, at altitudes of more than 1,800 metres, TAP’s engineers were faced with some of the most challenging terrain and difficult geological conditions of the entire pipeline route.

With no option of rerouting, TAP decided to drill a 480-metre micro-tunnel underneath the area to avoid installing the pipeline in unstable ground

The first gas supplies from the Azerbaijani Shah Deniz gas field to Europe via TAP are expected by the end of 2020.

Albania said it is ready to offer the full range of gas network maintenance services for the Albanian section of the Trans Adriatic Pipeline following the launch of commercial operation by TAP.

Albanian gas operator Albgaz has invited bids in a tender for subcontractor services for the maintenance of the Trans Adriatic Pipeline (TAP) section in Albania.

The bidding deadline is December 28 and the maximum budget available for the job is Lek 420 million (Dollar 4-0 million/Euro 3-4 million), VAT excluded, Albgaz said in a tender notice published by Albania's public procurement agency.

The services should be provided in the course of 36 months after the contract is awarded. They comprise engineering works for repair, rehabilitation and restoration of TAP infrastructure in Albania.

TAP looks with extreme attention to hydrogen and for this reason we are about to undertake a feasibility study to verify the percentages of hydrogen mixed with natural gas transportable by our infrastructure.

Trans Adriatic Pipeline’s initial capacity – approximately 10bcm/a – has already been allocated to the Shah Deniz shippers, in line with the gas transportation contracts signed in 2013 and under the provisions of the TPA (Third Party Access) exemption granted by the relevant regulatory Authorities.

TAP has set aside approximately 5 percent of the initial capacity for short-term booking. This is in addition to the already booked capacity. Short term capacity is set aside for the 25-year operating period. TAP will offer available short-term capacity to the market, as well as commercial reverse flow capacity, according to the ENTSOG Auction Calendar and the TAP Network Code, coordinated with the date for start of operations.

The TAP has been designed to be expanded from 10 to 20 billion cubic meters per year capacity of gas delivery from Turkish/Greek border to Italy.

The following modifications are required for the expansion:

- Additional compressors/coolers/filters/meters in GCS00

- New compressor station to be installed in GCS01

- New compressor station to be installed in ACS02

- Additional compressors/coolers/filters/meters in ACS03

- New filters/heaters/control valves/meters in PRT (Pipeline Receiving Terminal).

No modifications are required to pipeline sections between compressor stations.

Increasing the capacity of the TAP from 10 billion cubic meters per year to 20 billion cubic meters will require more than 1 billion euros of investments.

Baku-Tbilisi-Erzurum (South Caucasus Pipeline)

The length of the Baku-Tbilisi-Erzurum pipeline is more than 700 kilometers. This gas pipeline transports the gas produced at the Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea. The gas is supplied to Georgia and Turkey.

In the first three quarters of 2020, South Caucasus Pipeline (SCP) spent more than $35 million in operating expenditure and more than $8 million in capital expenditure in total

During the three quarters of 2020, the daily average throughput of SCP was 32.6 million cubic metres of gas per day.

The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey. The expanded section of the pipeline commenced commercial deliveries to Turkey in June 2018.

The SCP Co. shareholders are: BP (28.8%), TPAO (19.0%), AzSCP (10.0%), SGC Midstream (6.7%), PETRONAS (15.5%), LUKOIL (10.0%) and NICO (10.0%).

Project status

Azerbaijan exported 11.02 billion cubic meters of gas via the Baku-Tbilisi-Erzurum (BTE) pipeline from January through November 2020, which is 17.7 percent more compared to the same period of 2019.

Interconnector Greece-Bulgaria (IGB)

IGB is a gas pipeline, which will allow Bulgaria to receive Azerbaijani gas, in particular, the gas produced from Azerbaijan's Shah Deniz 2 gas and condensate field. IGB is expected to be connected to TAP via which gas from the Shah Deniz field will be delivered to the European markets.

The pipeline’s length will be 182 kilometers.

In the first stage, the pipeline capacity will be 3 billion cubic meters of gas, of which 2.7 billion cubic meters will be offered for long-term market, the remaining share of 0.3 billion cubic meters for short-term market.

In a second phase, depending on the evolution of the market, the capacity of the pipeline can be increased to 5.3 billion cubic meters of gas thanks to the addition of a compression station: 4.5 billion cubic meters of gas will be offered for long-term market and 0.5 billion cubic meters will be offered for short-term market.

Bulgarian Energy Holding EAD (BEH EAD) holds 50 percent of this project, while the remaining 50 percent is owned by Greek DEPA and Italian Edison.

In January 2014, the Trans Adriatic Pipeline AG (TAP) and Interconnector Greece-Bulgaria (ICGB) signed a Memorandum of Understanding and Cooperation (MOUC) aimed at establishing the technical cooperation in order to further develop strategic infrastructure in the region.

The total investment cost of the project is estimated at around 240 million euros (excluding VAT), of which 220 million euros account for capital expenditures.

Bulgarian government has approved the state guarantee in the amount of 110 million euros for the project. ICGB AD company has received up to 45 million euros, under the European Energy Program for Recovery.

Project status

The foundation laying ceremony of the IGB was held on May 22, 2019 in Bulgaria.

The project company ICGB which is responsible for the implementation of the Greece-Bulgaria gas interconnector, has successfully utilized the first tranche of the loan financing from the European Investment Bank (EIB).

The total value of EIB financing for the purposes of the project amounts to EUR 110 million, which is secured by a guarantee from the Bulgarian state.

The EIB loan agreement was signed with BEH in 2019, so the financing of the IGB project is fully secured. The total value of the interconnector that will connect the gas transmission networks of Bulgaria and Greece, is nearly EUR 240 million, provided from shareholders' capital, a loan from the EIB of EUR 110 million with a state guarantee and grants of EUR 39 million under the Operational Program "Innovation and Competitiveness 2014-2020". For the purposes of the project, EUR 45 million have been provided from the European Energy Program for Recovery.

ICGB AD has filed all required documentation for the European Investment Bank (EIB) second financial tranche, which is expected to be approved in January 2021.

The project company has just received approval for the first interim payment of the grant financing under the European Energy Program from Recovery (EEPR).

Current estimates indicate that the IGB project will be finalized within the approved budget.

The first batch of pipelines for Greek section of the Interconnector Greece-Bulgaria arrived at the port of Alexandroupolis in March 2020.

According to the contract, the construction of the gas pipeline from Stara Zagora through Haskovo to Komotini should be ready by the end of April 2021. Due to the pandemic, however, AVAX has requested an extension until the end of June 2021.

Bulgaria will get Azerbaijani gas from January 1, 2021. There are options that would allow the agreement with Azerbaijan’s state oil company SOCAR, which is for a period of 25 years, to be upheld accordingly until the Interconnector Greece-Bulgaria is ready for operation.

Possible options include temporary use of the existing transmission capacity between Greece and Bulgaria in reverse mode, which will allow flow of certain quantities of natural gas.

However, with its completion, IGB will provide the shortest and the most competitive route along the Southern Gas Corridor for bringing natural gas to Bulgaria.

Furthermore, Bulgaria and Greece are developing the project in synergy with other significant projects that would allow more options for LNG import and transmission from terminals in Greece, Turkey.

Currently, all major construction activities for the Interconnector Greece-Bulgaria (IGB) are underway and the workflow remains relatively uninterrupted despite the progressively more challenging situation amid the COVID-19 pandemic.

Line pipe production and delivery is almost completed in accordance with the approved schedule. The last deliveries are currently ongoing and should be finalized in the next couple of weeks.

Right-of-Way clearance along the entire Interconnector Greece-Bulgaria route is also near completion as 156 km out of 183 km are done in full.

The second wave of the COVID pandemic is affecting the project and the previously established workflow.

As international travel is becoming even more restricted, the IGB project and its multinational team are suffering unavoidable delays and other adverse consequences. All employees on site are tested on a regular basis and follow strictly the anti-COVID measures imposed by the local authorities. ICGB and its contractors are working in a joint effort to ensure the successful completion of the project while prioritizing the health and lives of all employees.

Geodetic survey for the Interconnector Greece-Bulgaria (IGB) will be finalized in the next few days.

Stringing continues as planned and as of December 8th there are 114 km spread along the route of the pipeline in preparation for the next steps.

Welding, field pipe bending and field joints coating are progressing as well. Over 80 km are now completed using automatic and manual welding and more than 50 km of the welded sections have been lowered in the trench. Backfilling continues, followed by fiber optic cable installation and reinstatement of the completed sections.

In 2020, given the serious progress on all major construction activities, EUR 66 million have been spent on works related to the completion of the Interconnector Greece-Bulgaria.

The total expenses as of the very beginning of the project amount up to EUR 102 million.

Ionian Adriatic Pipeline (IAP)

Ionian Adriatic Pipeline can be connected to the Trans Adriatic Pipeline (TAP) to transport gas to many countries in South-East Europe.

The pipeline with total length of 516 kilometers will stretch from Albania through Montenegro, and Bosnia and Herzegovina, to split in Croatia.

The capacity of the pipeline will amount to five billion cubic meters of gas per year.

TAP has already signed memorandums of understanding and cooperation with the developers of this project, in particular with companies of Plinacro (Croatia), BH-Gas (Bosnia and Herzegovina), Geoplin Plinovodi (Slovenia), as well as with the governments of Montenegro and Albania.

There has been created a TAP-IAP joint working group that gathers regularly to synchronize the timing of both pipeline projects and coordinate the technical issues of interconnection. In particular, Croatia expects to receive approximately 2.5 billion cubic meters of gas per year through the IAP.

Project status

Possible time of implementation of the project hasn’t been announced yet.

A Memorandum of Understanding (MoU) on the Ionian Adriatic Pipeline (IAP) was signed in August 2016 by Albania, Bosnia and Herzegovina, Croatia, Montenegro and SOCAR.

In September 2016 it was announced that SOCAR will be a technical consultant in IAP project.

Western Balkans Investment Framework (WBIF) allocated 2.5 million euros worth grant for IAP in February 2017.

Implementation of Terms of Reference for the Ionian-Adriatic Pipeline (IAP) project started. The Terms of Reference have been agreed upon among stakeholders in April 2018, and the implementation started in May 2018.

The final report on the environmental impact study of the Ionian Adriatic Pipeline project is expected to be received soon. The comments received during the public debate are processed by the author of the study. However, the situation with the COVID-19 has negatively affected the implementation of these activities. All the activities for the Ionian Adriatic Pipeline project have been postponed due to the COVID-19 pandemic.

The European Commission recognises the importance of the Ionian-Adriatic Pipeline for the regional gas market, in particular Croatia, Albania, Montenegro and Bosnia and Herzegovina.

As a signal of its relevance for the region, the Commission has awarded IAP the status of Project of Mutual Interest (PMI), category of infrastructure projects that includes those that benefit one or more Contracting Parties(Western Balkan countries, Ukraine, Moldova, Georgia) and one or more Member States but do not have a Project of common interest (PCl) status in the European Union, in line with the Regulation (EU) 347/2013.

Given its PMI status, Commission’s funding under specific programs, such as the Instrument for Pre-accession Assistance (IPA), could be explored for the support of the construction of IAP in the Western Balkan countries.

Ighdir-Nakhchivan gas pipeline

Azerbaijan and Turkey have signed a memorandum of understanding on Ighdir-Nakhchivan gas pipeline. The document was inked signed on Dec.15 between the energy ministries of the two countries.

The project will be implemented by Azerbaijan’s state oil company SOCAR and Turkey’s BOTAS. Nakhchivan currently receives gas mainly through Iran. The supply of Azerbaijani gas through Turkey will help Nakhchivan meet its gas demand. The Turkish section of the pipeline from Ighdir to Sadarak, Nakhcivan, will be 85 kilometers long.

Project status

The Igdir-Nakhchivan gas pipeline project is scheduled to be completed within a year.

The pipeline’s capacity will 500 million cubic meters per year.

Engineering works were completed in October. Preparations for holding the construction tender are ongoing. The construction tender will be completed in the first quarter of 2021.

Trans-Caspian Gas Pipeline

Turkmenistan is studying the possibility of delivering its energy resources to the European market. To this end, it promotes the project for construction of the Trans-Caspian Gas Pipeline to the coast of Azerbaijan, from where the Turkmen gas can be delivered to Turkey and further to Europe.

The Trans-Caspian Gas Pipeline project may be implemented as part of the Southern Gas Corridor.

Recently, Turkmenistan, Azerbaijan, Turkey, Georgia and EU have intensified the talks on the implementation of the Trans-Caspian Gas Pipeline project.

Project status

Currently, there are no direct agreements on the implementation of the Trans-Caspian Gas Pipeline project. The talks on this project have been going on since 2011 between the major interested parties: EU, Azerbaijan and Turkmenistan.

Turkmenistan has expressed its readiness to supply 40 billion cubic meters annually to Europe, 10 billion cubic meters of which can be provided by the Petronas company, which operates in the Turkmen sector of the Caspian Sea. The remaining volume can be provided by the 800-km East-West pipeline, which originates from the Galkynysh field and finishes off the coast of the Caspian Sea.

In April 2015, a declaration on development of energy cooperation was signed in Ashgabat following the multilateral talks on the Trans-Caspian Gas Pipeline project between Turkmenistan, Azerbaijan, Turkey and the EU.

Moreover, in order to consider the complex of organizational, legal, commercial, technical and other issues related to gas supply from Turkmenistan to Europe, the parties agreed to create a working group at the level of deputy ministers in charge of energy issues of Turkmenistan, Azerbaijan, Turkey and the EU.

Islamic Development Bank is ready to study the possibility of supporting the Trans-Caspian Gas Pipeline project.

In June 2018, Georgia and the European Commission agreed to jointly finance the commercial engineering of the project.

The European Commission is conducting technical discussions with Turkmenistan to find out how and under what conditions Turkmen gas can be supplied to the EU, and also maintains close ties with Azerbaijan on this issue.

However, any possible version of the Trans-Caspian pipeline project should be built and financed by private companies.

Recently, the European Commission proposed that Turkmenistan develop a feasibility study for Turkmen gas supplies. The EU companies need the necessary guarantees from Turkmenistan for serious participation in this project.

Azerbaijan-Georgia-Romania Interconnector (AGRI)

AGRI project envisages transportation of Azerbaijani gas to the Black Sea coast of Georgia via gas pipelines. Azerbaijani gas delivered to Georgia's Black Sea coast will be liquefied at a special terminal and following this, it will be delivered in tankers to a terminal at the Romanian port of Constanta.

Further, it will be brought to the gaseous state and sent via Romanian gas infrastructure for meeting the demands of Romania and other European countries.

The project’s cost is estimated at 1.2-4.5 billion euros depending on the terminals’ capacity, which can vary between 2 and 8 billion cubic meters of gas per year.

The participants of the AGRI project are SOCAR, Georgia's Oil and Gas Corporation, as well as MVM (Hungary) and Romgaz (Romania). The parties established the SC AGRI LNG Project Company SRL with the purpose of developing the Feasibility Study.

Project status

Azerbaijan, Georgia and Romania signed on June 24, 2015 a joint declaration on supporting the development of the Azerbaijan-Georgia-Romania Interconnector project.

British Penspen engineering company presented to shareholders of AGRI the final version of the feasibility study (FS) of the project in late 2015.

Turkmenistan is highly interested in the Azerbaijan-Georgia-Romania Interconnector project. To supply this project with Turkmen gas, it is necessary to build a separate gas pipeline along the Caspian seabed to the coast of Azerbaijan or to deliver liquefied gas through the sea via tankers.

It is expected that the AGRI gas pipelines system project (Azerbaijan-Georgia-Romania Interconnector), which provides for the transportation of Azerbaijani gas to Europe, will be implemented after 2024-2026.

Presently, the shareholders of the AGRI LNG project company are discussing issues related to the further development and implementation of the AGRI project, presumably after 2024-2026, when the second stage of development of Azerbaijan’s Shah Deniz field and other fields will be completed.


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