BAKU, Azerbaijan, December 27. Southern Gas Corridor (SGC) started transportation of Azerbaijani gas to Europe on December 31, 2020. It transports of gas from the Caspian Sea region to European countries through Georgia and Türkiye.
This large-scale project is aimed at diversification of energy supply routes and sources, thereby contributing to strengthening Europe’s energy security. 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.
Total non-current assets of the Southern Gas Corridor CJSC surpassed $12 billion as of the first half of 2023, with oil and gas properties contributing significantly at nearly $11.4 billion.
The company's total current assets exceeded $2.7 billion, resulting in a cumulative total asset value of $14.7 billion.
Revenues of the CJSC stood at around $1.4 billion in the first half of 2023. Its gross profit amounted to $1.15 billion, while operating profit stood at $940.8 million. Profit before income tax stood at $739.8 million.
Azerbaijan exported 22.05 billion cubic meters (bcm) of natural gas from January through November 2023, which is nine percent more than the indicator of the same period of 2022.
From this volume, 10.85 bcm were exported to Europe, 8.7 bcm to Türkiye, including 5.1 billion cubic meters via the Trans-Anatolian Natural Gas Pipeline (TANAP), and 2.5 bcm to Georgia.
Azerbaijan's gas exports to Europe is expected to equal 12 bcm as of the end of 2023.
Back on July 18, 2022, a "Memorandum of Understanding on Strategic Partnership in the field of energy between the European Union represented by the European Commission and the Republic of Azerbaijan" was signed between Azerbaijan and the European Union.
The sides agreed to support bilateral trade of natural gas, including exports to the European Union, via the Southern Gas Corridor, of at least 20 billion cubic meters of gas annually by 2027, in accordance with commercial viability and market demand.
Expansion of the SGC will require some $20 billion. Thus, Germany proposes expanding the Southern Gas Corridor with a new pipeline through the Alps.
Azerbaijan started supplying gas to Romania from January 1, 2023 following agreement signed on December 16, 2022 providing for transportation of one billion cubic meters of gas.
On February 3, 2023, the State Oil Company of Azerbaijan (SOCAR) and Romgaz S.A., Romania's energy company, signed a gas supply agreement during the Southern Gas Corridor Advisory Council's meeting in Baku.
Sofia hosted a ceremony of signing the Memorandum of Understanding (MoU) on the promotion of cooperation between Bulgartransgaz (Bulgaria), Transgaz (Romania), FGSZ (Hungary), Eustream (Slovakia), and the State Oil Company of Azerbaijan Republic (SOCAR) on April 25.
The aim of the MoU is to promote and encourage cooperation of gas transmission system operators from Slovakia, Hungary, Romania and Bulgaria in order to ensure diversified supply of additional gas volumes to the European Union utilizing the capacities of the STRING (Solidarity Ring) project promoted by the respective transportation system operators (TSOs).
In a short-time and with incremental capacity improvements to the existing infrastructure, this truly cross-border initiative could transport up to 5-9.5 bcm of gas per year from Azerbaijan to Eastern, Central and Western Europe via Bulgaria, Romania, Hungary, and Slovakia.
The total estimated investment cost of the Solidarity Ring initiative is around 730 million euro. It could be realized by the end of 2026 with necessary EU financial support. The largest Hungarian wholesale natural gas trader, MVM CEEnergy, and SOCAR signed a contract on June 2 to transport 100 million cubic meters of gas.
In July, SOCAR began injecting the first 50 million cubic meters of gas into Hungarian storage facilities.
On December 10, a ceremony was held in Niš, Serbia to launch the Serbia-Bulgaria Gas Interconnector, which will provide access to Azerbaijani natural gas.
The project of building the gas interconnector Niš– Dimitrovgrad – Bulgaria is financed partly through EU grants, in the amount of 49.6 million euro, as well as 25 million euro of a favorable loan from the European Investment Bank that Serbia will pay for the part of the gas pipeline passing through Serbia. The Republic of Serbia has allocated 15 million euro and 7.5 million euro for preparatory work and the design.
ESM Prodazba, the gas division of North Macedonia's energy company Elektrani na Severna Makedonija (ESM), has informed about the start of natural gas supplies from Bulgarian trader Graystone Bulgaria LTD in December, with Azerbaijani gas present in the mixture purchased by North Macedonia.
SOCAR is anticipated to make a significant decision about the gas supply to the Albanian city of Korce in late December. The plan is to present a comprehensive feasibility study for this project by the end of this month and to make the final investment decision (FID) on SOCAR's financing of the project, marking Azerbaijan's first direct investment in the construction of a gas distribution line in Albania.
Azerbaijan has been among the top 5 natural gas suppliers to Europe in the second quarter of 2023.
The European Commission's data showed that Norway remained the EU’s biggest pipeline gas exporter with a share of 47.7 percent (20.6 bcm), down from a 52.5 percent in the previous quarter but up from 35.9 percent a year earlier. The second largest exporter to the EU became North-Africa with 19.6 percent export share (8.5 bcm), followed by UK (13.8 percent, 6 bcm), Russia (12.4 percent, 5 bcm) and Azerbaijan (6.5 percent, 2.8 bcm).
Trans-Anatolian Natural Gas Pipeline (TANAP)
TANAP transports gas from Stage 2 of Azerbaijan’s Shah Deniz field from Georgian-Turkish border to Türkiye’s western border. The total cost of TANAP turned out to be lower than $7 billion.
The initial capacity of TANAP is 16 billion cubic meters of gas per year, with possibility of expanding to 31 billion cubic meters per year in the future. Around six billion cubic meters of gas is delivered to Türkiye, while the rest of the volume is supplied to Europe.
TANAP shareholders are as follows: Southern Gas Corridor CJSC – 51 percent, SOCAR Türkiye Enerji – seven percent, BOTAS – 30 percent and bp – 12 percent.
The filling of the TANAP pipeline across Türkiye began 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 Türkiye 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, Türkiye).
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.
Azerbaijan exported 5.1 billion cubic meters of gas to Türkiye via TANAP from January through November 2023.
Türkiye and Azerbaijan also agreed to double the capacity of the TANAP. The pipeline's capacity may be expanded to 24 billion cubic meters of gas per year with the construction of two additional compressor stations.
The process of expansion, meaning the third phase may take four or five years, since it will need an investment decision, necessary equipment and construction work.
Currently, the possibility of transportation of hydrogen mixture via the pipeline is being studied. Technically, TANAP may transport two percent hydrogen mixture. By the end of 2023, 10.2 billion cubic meters of gas are expected to be transported to Türkiye through TANAP.
The current capacity of TANAP is 275,000 barrels of oil equivalent per day. The estimated useful life of TANAP system is expected to last until 2062.
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 is 10 billion cubic meters per year with the possibility of expanding to 20 billion cubic meters.
The pipeline 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).
Some large European markets, such as Germany, France, the UK, Switzerland and Austria can receive gas from Italy, which is the end point of TAP.
Following the start of commercial operations on November 15, 2020, the Trans Adriatic Pipeline (TAP) AG confirmed on December 31, 2020 the commencement of gas flows from Azerbaijan. The first gas reached Greece and Bulgaria, via the Nea Mesimvria interconnection point with DESFA, as well as Italy, via the Melendugno interconnection point with SNAM Rete Gas (SRG). Total project cost for TAP stood at 4.5 billion euro.
Axpo sold its five-percent stake in the Trans Adriatic Pipeline AG (TAP) to TAP shareholders Fluxys and Enagás S.A on January 27.
Under the sale and purchase agreement, Belgium’s Fluxys will acquire one percent and Spain’s Enagás four percent of Axpo’s five percent equity stake. Both companies will thus reach 20 percent ownership of TAP, which includes UK shareholder bp (20 percent), SOCAR (20 percent), and Italy’s Snam (20 percent).
The total value of the transaction amounts to 210 million euro. has completed the purchase of additional share of the Trans Adriatic Pipeline (TAP).
The cost of the purchase of Axpo's four percent share in TAP by Spanish Enagas company amounted to 168 million euro. Axpo Solutions AG will continue to market for long-term gas volumes secured from Shah Deniz consortium.
TAP consortium launched the first stage of expansion on January 30. The consortium will allocate 1.2 billion cubic meters of additional capacity per year under long-term contracts starting in 2026.
Besides, TAP consortium joined the Oil and Gas Methane Partnership (OGMP 2.0), the flagship oil and gas reporting and mitigation program of the United Nations Environment Program (UNEP) on February 3.
TAP is aimed at obtaining OGMP 2.0’s “Gold Standard” status by 2025.
Following the market test for increase in the TAP pipeline capacity, 1.2 bcm were requsted to be additionally delivered from 2026 to December 2028 and, in a second tranche, from October 2026 to September 2033. The transport contracts were signed for this new long-term capacity which will be available at end-2025. Of this volume, one bcm will be delivered to Italy and 200 million cubic meters to Albania.
Azerbaijan Gas Supply Company Limited has signed new contracts with the TAP AG consortium and SNAM company of Italy for gas supplies of one bcm each, for the period of 2026 through 2028.
TAP consortium has been studying the possibility of installing electric motors powered by renewables.
The expansion of TAP represents an opportunity to implement a series of solutions aimed at reducing the carbon footprint, cutting fugitive emissions and transporting green gases (hydrogen and biomethane) in the future. For this reason, the possibility of connecting the compressor stations to very high voltage networks is being studied, as well as installing electric motors powered by renewable sources instead of gas turbines. The compatibility of TAP pipes with the transport of hydrogen at 100 percent is also being tested in specialized laboratories.
TAP is also a participant in the Joint Industry Project H2Pipe for the development of the world’s first guideline for the transport of hydrogen in existing and new offshore pipelines, which will not only benefit TAP, but other transnational interconnectors.
On March 21, EXA Infrastructure (EXA) deployed Infinera's ICE6 800G coherent optical solution on the EXA Trans Adriatic Express (TAE). TAE is a joint venture between EXA Infrastructure and the Trans Adriatic Pipeline AG (TAP), designed to provide the most direct and reliable fiber optic infrastructure between Italy, Greece and Türkiye.
In April 2023 the Trans Adriatic Pipeline (TAP) AG Consortium distributed dividends to its shareholders in the amount of 265 million euro. The portion of the Southern Gas Corridor closed joint-stock company (CJSC) of this dividend distribution was equal to 53 million euro.
TAP consortium, in collaboration with neighboring TSOs, commenced the 2023 Market Test in accordance with the Guidelines for the 2023 Market Test of TAP AG, as approved by the National Regulatory Authorities of Italy, Greece, and Albania, on July 5.
Besides, TAP consortium began preliminary work to increase gas transportation. The work consists of construction work related to the preparation of new tie-ins at the compressor station on July 24.
Spanish Enagas company has completed the purchase of additional share in TAP on July 25, 2023. Thus, the total stake in TAP amounted to 20 percent. Fluxys also finalized the acquisition of the one percent stake of Axpo.
The TAP Consortium initiated the civil construction work associated with the preparation of tie-ins at the compressor station to increase gas supplies on September 13. This ongoing work is scheduled to be complete during 4Q2023. Following this, the main construction work will commence with further civil work for foundations.
The TAP consortium disclosed the key elements of its future business strategy on October 10.
The consortium outlined a comprehensive plan with three primary objectives:
- Promoting the expansion of transport capacities;
- Carbon neutrality through electrification: The consortium aims to promote carbon neutrality by electrifying compressor stations located in Greece and Albania. This initiative aligns with efforts to reduce the carbon footprint of pipeline operations.
- Facilitating renewable gases: TAP intends to facilitate the transportation of renewable gases, contributing to the transition towards cleaner and sustainable energy sources.
TAP has to date supplied more than 30 billion cubic meters of gas to Greece, Bulgaria and Italy.
Gas supply via TAP to Europe for 2023/2024 winter is expected to stand at 32 million cubic meters per day.
The TAP consortium is consulting with Greek gas transportation operators on a technical agreement covering the possibility of providing blue fuel to eurozone gas buyers via TAP from the new floating liquefied natural gas terminal (FSRU) in Alexandroupolis.
The consortium is also currently conducting a market test to see if there will be spare capacity to pump gas from the new Greek gas terminal through the TAP system and possibly also through IGB (Interconnector Greece Bulgaria).
The TAP market test was conducted on October 20, 2023, in two phases, and the results will be known on January 31, 2024.
Baku-Tbilisi-Erzurum (South Caucasus Pipeline - SCP)
The SCP Co. shareholders are: bp (28.8 percent), TPAO (19 percent), PETRONAS (15.5 percent), AzSCP (10 percent), NICO (10 percent), LUKOIL (10 percent) and SGC Midstream (6.7 percent).
The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Türkiye. The expanded section of the pipeline commenced commercial deliveries to Türkiye in June 2018 and to Europe in December 2020.
On August 1, 2021 the transition of the technical operatorship of the South Caucasus Pipeline Company (SCPC) from BP Exploration (Shah Deniz) Limited to SOCAR Midstream Operations LLC was finalized. The transition process which started in March 2020 was successfully completed in July 2021.
The transfer of technical operatorship was carried out in fulfillment of the obligations undertook in the revised SCPC Pipeline Owners’ Agreement, signed in December 2013 as part of the Final Investment Decision on the Shah Deniz Stage 2 and South Caucasus Pipeline Expansion (SCPX) projects.
The South Caucasus Pipeline (Baku-Tbilisi-Erzurum) transported more than 19.9 billion cubic meters of gas from January through November 2023, compared to 18.9 billion cubic meters during the same period in 2022.
This reflects a 5.5-percent increase in the volume of gas supplies through the Baku-Tbilisi-Erzurum pipeline compared to the corresponding period last year.
In the reporting period of 2023, it constituted 55.3 percent of the total gas transported through Azerbaijan's main gas pipelines, up from 53.8 percent in the same period of 2022.
Interconnector Greece-Bulgaria (IGB)
IGB is a gas pipeline, which allows Bulgaria to receive Azerbaijani gas, in particular, the gas produced from Azerbaijan's Shah Deniz 2 gas and condensate field. IGB is connected to TAP via which gas from the Shah Deniz field is delivered to the European markets.
The pipeline’s length is 182 kilometers.
In the first stage, the pipeline capacity stands at 3 billion cubic meters of gas, of which 2.7 billion cubic meters is 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 euro (excluding VAT), of which 220 million euro account for capital expenditures.
The IGB is designed to operate for 50 years.
The prevailing majority of finishing work within the IGB is now successfully completed.
The implementation of anti-erosion measures is still ongoing in some mountainous areas with steep slopes, completion is expected within the next few months.
The IGB provides about half of Bulgaria's natural gas consumption. Along with the country, Moldova has also imported gas through the interconnector. Back in late October and early November 2022, the state company Energocom from Moldova was the first company to use this gas pipeline.
Moldova received around 200 million cubic meters of natural gas through the IGB, and plans to continue reserving capacities in this interconnector.
In general, the current list of shippers of the IGB consists mainly of EU-based companies, with a growing interest from companies that are engaged in LNG trading. Bulgarian and Greek companies form a significant part of the registered shippers.
The ICGB company is also evaluating the possibility of transporting hydrogen through the IGB and related issues. The obvious technical constraints are expected to be resolved in the foreseeable future, at least to a certain level sufficient enough for transportation of blended gases.
Moreover, the real prospects for hydrogen pumping depend on the market of this commodity. For IGB to start pumping hydrogen, there needs to be synergy with at least several consecutive infrastructure operators. Adjacent operators should also be ready for hydrogen transportation to/from a certain destination to enable the actual process.
On February 17, Bulgarian independent transmission operator (ICGB) reached an agreement with the EPC contractor for the Greece-Bulgaria gas interconnector construction on the issue of compensation for losses due to delays in pipeline construction.
The agreement reached ensures that the accrued penalties are collected in favor of ICGB, prevents future disputes and possible arbitration proceedings, and lays a solid foundation for the conclusion of the contractual commitments by both parties without significant costs.
The ICGB received the final payment under Innovation and Competitiveness (OPIC) for construction of infrastructure on May 29.
The total funding allocated under OPIC amounts to 39 million euro, which is disbursed in stages after rigorous inspections to ensure the quality and successful completion of the project.
The latest tranche of 1.7 million euro was utilized, marking the completion of the funding process under OPIC.
The ICGB selected a leading insurer for the IGB gas pipeline on June 7. DZI - General Insurance EAD will be responsible for insurance of the activities of the IGB gas pipeline in its operational phase.
The comprehensive insurance premium, which allows for a potential extension of up to 24 months beyond the initial 12-month term, amounts to 2.6 million euro.
The insurance policy provides coverage for the following risks:
- All types of property damage, including breakdown of machinery/facilities and business interruption.
- General liability insurance encompassing "Product liability," "Pollution liability," and "Employer's liability."
- Risks associated with terrorism, sabotage, strikes, riots, civil disturbances, and malicious acts, including disruption of commercial and operational activities.
- "Terrorism liability" – liability towards third parties.
Annual auctions for non-exempted capacity of the Interconnector Greece-Bulgaria (IGB) were announced on June 14.
A market test was launched to increase the technical capacity of IGB on July 4.
The process is divided into two main phases - non-binding and binding phases - and generally lasts two years. It will be implemented in close cooperation with neighboring transmission system operators Bulgartransgaz (Bulgaria), DESFA (Greece) and TAP.
Auctions for IGB capacity booking completed for 2023-2024 gas year on July 7. A total of over 37 million kWh/day has been reserved for the gas year 2023/2024, which represents more than 70 percent of the available non-exempted capacity for that period.
The remaining quantity will be made available through quarterly, monthly, and daily auctions.
The local market of Bulgaria has witnessed the entry of several new shippers who have secured capacity through booking in the interconnector for the first time.
With the current total capacity of approximately three bcm/y, the interconnector has already allocated 1.57 bcm/year under long-term contracts, providing access to natural gas from Azerbaijan.
The remaining available capacity is being offered through two major European platforms: the PRISMA booking platform for the interconnection points at Komotini, Greece, in coordination with the transmission system operator of the Trans-Adriatic Pipeline (TAP) and DESFA, and the Regional Booking Platform (RBP) for the interconnection point at Stara Zagora, Bulgaria, in cooperation with the national operator Bulgartransgaz.
Bonatti, the international general contractor providing services to the energy industry, is building a new compression station in Greece to supply the IGB on August 1.
A compression station will be constructed for DESFA, the Greek National Natural Gas Transmission System. It will be located near the border with Türkiye and Bulgaria and will be connected to gas networks of Greece and Bulgaria. The purpose of the project is to strengthen supply to the south and center of Europe.
A standout feature of the new compression station is of "H2 ready" qualification, making it well-prepared to operate with hydrogen, considering the anticipated developments in the energy market.
The company aims to complete the project within an ambitious timeframe of just 22 months.
The last installment of funds was received for IGB on October 26.
This final tranche, amounting to 22.1 million euro, was granted under the European Energy Program for Recovery (EEPR) to support the implementation of the IGB, following a successful external audit.
The overall project, with a total value of 253 million euro, has secured financing from various sources. This includes contributions from shareholders BEH and IGI Poseidon, a 109.9 million euro worth loan from the European Investment Bank (EIB), 45 million euro from the European Energy Program for Recovery (EEPR), and an additional 39 million euro allocated under the Operational Program "Innovations and Competitiveness" (OPIC).
IGB may see its capacity boosted from the current three bcm/y to a total five bcm/y as early as 2025.
With the non-binding phase of the process completed, we received indications for significant market interest in expanding the pipeline’s capacity. The binding phase will come in July 2024.
ICGB has already completed the Demand Assessment Reports as a next step in the process, initiating joint technical studies for increase of the capacity at the interconnection points of the pipeline with the adjacent network systems in Greece and Bulgaria.
ICGB is now also successfully offering capacity for volumes to come from the Alexandroupolis LNG terminal, creating more flexible opportunities for new shippers to enter the local market.
Following the decision to proceed with the expansion of the Interconnector Greece-Bulgaria (IGB), subsequent to the ongoing tender for the detailed engineering design of the gas metering station near Stara Zagora, the plan involves initiating additional tenders to facilitate various aspects of the project.
The entire process adheres to the principle of public tenders, ensuring a competitive and transparent selection of contractors and suppliers for the expansion project in full compliance with the relevant legislation.
On a commercial level, the ICGB, the operator of the Interconnector Greece-Bulgaria (IGB), has held yearly and quarterly auctions, as a result of which 84 percent of the capacity for gas year 2023/2024 is booked.
An incremental capacity process to assess market demand for increasing the technical capacity of IGB pipeline from the current three bcm/y to five bcm/y has been already launched. The indications from the non-binding phase are positive as the market interest was higher than initial expectations.
The latest data showed that Bulgaria imported 76.7 million cubic meters of natural gas from Azerbaijan in October 2023, as compared to 79.8 million cubic meters in September, marking a 3.9 percent month-on-month decrease.
The total value of these imports decreased from 23.4 million euro to 23.1 million euro, reflecting a 1.3 percent decline. Over the first ten months of the year, gas exports from Azerbaijan to Bulgaria amounted to 767.3 million cubic meters, with a total value of 265.9 million euro.
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.
A TAP-IAP joint working group has been established, 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.
It was announced in March that basic designs of the IAP’s Albanian and Montenegrin sections have been completed.
The Croatian sections of the IAP have seen great progress, largely made possible by European Union funds such as the Western Balkans Investment Framework (WBIF). In particular, construction permits have already been obtained for some sections of the pipeline in Croatia.
The Croatian gas transmission operator Plinacro company said that during the preparatory stages of the project the company received a grant under the WBIF for a comprehensive feasibility study in the amount of 3.5 million euro, while Montenegro and Albania received an additional grant of 4.2 million euro.
About three million euro has been spent to date on the construction of the Croatian section of the Ionian-Adriatic pipeline. Croatia hopes for further funding for the IAP project.
The IAP is expected to be completed by 2028. The IAP was previously scheduled to be completed by 2025.
Montenegro Bonus has started the process of establishing a regional company for the IAP project in July. It was agreed to sign the founding acts by end-2023. The company for the Ionian-Adriatic pipeline is expected to be created in early 2024.
The permission for construction of the IAP's second section in Croatia can be obtained soon.
For the IAP project on the Croatian side, environmental impact studies have been drawn up for all sections of the gas pipeline, a positive environmental decision has been obtained, basic designs have been drawn up and location permits have been obtained.
Ighdir-Nakhchivan gas pipeline
Azerbaijan and Türkiye signed a memorandum of understanding on Ighdir-Nakhchivan gas pipeline on December 15, 2020. The project envisaged cooperation between Azerbaijan’s state oil company SOCAR and Türkiye’s BOTAS.
The Igdir-Nakhchivan pipeline will not only allow for the diversification of Nakhchivan's gas supply but also eliminate its dependence on a single source. The project is among the priority initiatives outlined in the "State Program for the Socio-Economic Development of the Nakhchivan Autonomous Republic for 2023-2027", adopted on June 5 of this year.
The pipeline stretches 97.5 kilometers from Igdir to the Sadarak district, including a 17.5-kilometer Azerbaijani section and an 80-kilometer Turkish section. The pipeline is capable of transporting 2 million cubic meters of gas per day and 730 million cubic meters annually. This will fully meet Nakhchivan's gas needs.
Furthermore, the pipeline's capacity can be more than doubled in the future.
A groundbreaking ceremony for the gas pipeline took place on September 25. Türkiye expects the completion of work related to the Igdir-Nakhchivan gas pipeline in 2024.
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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 Türkiye and further to Europe.
The Trans-Caspian Gas Pipeline project may be implemented as part of the Southern Gas Corridor.
Currently, there are no direct agreements on the implementation of the Trans-Caspian Gas Pipeline project.
Turkmenistan has expressed 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, Türkiye 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, Türkiye 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 euro depending on the terminals’ capacity, which can vary between two and eight 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.
Azerbaijan, Georgia and Romania signed on June 24, 2015 a joint declaration on supporting the development of the Azerbaijan-Georgia-Romania Interconnector project.
UK 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.
Azerbaijan-Georgia-Romania Interconnector project is currently frozen.
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