Transit of energy resources to step up Kazakhstan-Azerbaijan cooperation
Export of energy resources, including gas and liquefied gas to third countries through the territory of Kazakhstan and Azerbaijan will strengthen the transit cooperation between the two countries, Ambassador Extraordinary and Plenipotentiary of Kazakhstan Beibit Isabayev told Trend.
"Recently we held a meeting of the intergovernmental commission between our countries, where we approved a road map for trade and economic relations. We’ve focused on the priority areas of our cooperation, which include the export of Kazakh wheat, engineering, cooperation in the oil industry, as well as the export of agricultural products, dried fruits and vegetables from Azerbaijan to Kazakhstan," Isabayev said.
He added that cooperation between Azerbaijan and Kazakhstan is also actively developing in the sphere of tourism.
"In tourism sphere, I think, we should learn from Azerbaijan, since Azerbaijan has recently managed to attract a large number of tourists, about three million a year. Several meetings have been scheduled between representatives of relevant structures of our countries, with further negotiations on joint projects in the tourism sector," the ambassador said.
Trade turnover between Azerbaijan and Kazakhstan in 10 months of 2017 amounted to $105.4 million.
Export of goods from Azerbaijan to Kazakhstan amounted to $81.3 million and imports of Kazakh products to Azerbaijan amounted to $24.1 million.
Both countries have repeatedly stressed the discrepancy between mutual trade and real potential. In 2017, the countries announced their plans to increase the turnover by several times in near future.
First tranche of EBRD loan for TANAP received
Azerbaijan’s Southern Gas Corridor closed joint-stock company (CJSC) has already received the first tranche of the loan approved by the European Bank for Reconstruction and Development (EBRD) for the Trans Anatolian Natural Gas Pipeline (TANAP), Trend learned from the CJSC.
The amount of the first tranche is approximately $151 million, said the company.
The EBRD Board of Directors approved a $500 million loan for TANAP on Oct. 18, 2017. The loan is issued for a period of 18 years.
TANAP project envisages transportation of gas from Azerbaijan's Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction the gas will be delivered to Europe in early 2020.
Earlier, Director General of Southern Gas Corridor CJSC Afgan Isayev said the total cost of TANAP (from the start of the pipeline’s construction until the completion of the work and transportation of first gas to Turkey and Europe) has decreased by more than $0.5 billion, as compared to the figure announced last year ($8.5 billion) and amounts to slightly less than $8 billion in accordance with TANAP’s new budget approved in October this year.
The length of TANAP is 1,850 kilometers with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.
Currently, the shareholders of TANAP are the Southern Gas Corridor CJSC (58 percent), Botas (30 percent) and BP (12 percent).
The World Bank has approved allocation of $800 million to Azerbaijan and Turkey. Of this amount, $400 million was allocated to BOTAS, while the other $400 million was provided to the Southern Gas Corridor CJSC.
Additionally, the Asian Infrastructure Investment Bank (AIIB) has approved allocation of $600 million for the SGC.
A guarantee of allocation of $750 million for SGC has been provided by the Multilateral Investment Guarantee Agency (MIGA).
Work programs on ACG, Shah Deniz projects for 2018 approved in Azerbaijan
Steering committees of the Azerbaijan International Operating Company (AIOC), which develops the Azeri-Chirag-Gunashli (ACG) block of oil fields, and the consortium for the Shah Deniz gas field’s development approved work programs for 2018, a source in Azerbaijan’s oil and gas market told Trend.
“A meeting of the steering committees took place,” the source said. “All discussions went smoothly, the work programs for 2018 and the related budgets on both projects were approved.”
A contract for development of the ACG block of oil and gas fields was signed in 1994. A ceremony to sign a new contract on the ACG development was held in Baku Sept. 14, 2017.
The new ACG participating interests are as follows: BP - 30.37 percent; AzACG (SOCAR) - 25 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; ONGC Videsh Limited (OVL) - 2.31 percent.
A contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserve is estimated at 1.2 trillion cubic meters of gas.
The shareholders in the contract are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Statoil (15.5 percent), Lukoil (10 percent), NICO (10 percent) and TP (19 percent).
As part of the Shah Deniz 2 project, gas production will increase from 9 to 25 billion cubic meters per year. The produced gas will be exported to Turkey and the European markets through the expansion of the South Caucasus Pipeline and the construction of the Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipelines.
Cavusoglu: Azerbaijan, Turkey, Iran keen to expand energy co-op
Azerbaijan, Turkey and Iran intend to expand energy cooperation, said Turkish Foreign Minister Mevlut Cavusoglu at a press conference following the 5th trilateral meeting of the foreign ministers of Iran, Azerbaijan, and Turkey in Baku. Cavusoglu said that Azerbaijan and Iran are important countries for Turkey in terms of energy cooperation.
Turkey imports natural gas from Iran and intends to increase the volume of purchases, he noted.
Currently, Turkey is the biggest gas customer of Iran and imports 30 million cubic meters per day from its eastern neighbor.
One of the most important energy projects – construction project of the Trans Anatolian Natural Gas Pipeline (TANAP) – is currently being implemented between Turkey and Azerbaijan, said Cavusoglu.
TANAP project envisages transportation of gas from Azerbaijan’s Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction natural gas will be delivered to Europe in early 2020.
The length of TANAP is 1,850 kilometers, with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.
SOCAR, Statoil to sign detailed agreements on co-op
Norway’s Statoil company and Azerbaijan’s state oil company SOCAR will soon sign more detailed agreements on cooperation, a source in Statoil told Trend. According to the source, Statoil is very pleased with the recent signing of agreements of intentions on the main principles of cooperation with SOCAR. "Statoil has been operating in Azerbaijan for 25 years and 2017 has become a jubilee year for us,” the source said. “After the extension of the agreement on the development of the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields, we are pleased to take the next step and stress serious intention to make investments into new joint opportunities in upstream sector together with SOCAR."
According to the source, Statoil looks forward to working with SOCAR to develop the Karabakh oil field and other offshore fields in the Caspian Sea.
"We hope for further cooperation with SOCAR and we will contribute to the development of the Azerbaijani oil and gas industry through the introduction of our technologies and working approaches," the source said. “The concluded agreements of intentions will serve as the basis for further detailed commercial agreements with SOCAR. We will concentrate our efforts on the preparation of detailed agreements.”
SOCAR and Statoil have recently signed two contracts on main principles of cooperation.
As a result of long discussions and consultations, specialists developed and agreed upon the main principles of prospective cooperation related to a Risk Service Contract (RSC) for the development of the Karabakh oil field, as well as a PSA (production sharing agreement) on various prospective structures, the message said.
The first contract covers issues of exploration, development and main commercial principles and provisions of the PSA on some promising structures in the Azerbaijani sector of the Caspian Sea, while the second contract covers main commercial principles and provisions of the RSC regarding the Karabakh oil field.
The Karabakh field was discovered in 2000. Its initial oil reserves amount to 100 million tons. SOCAR operates Karabakh field’s development.
Azerbaijan, ADB ink $524.5M loan deal on Shah Deniz 2
Azerbaijani government and Asian Development Bank (ADB) have signed loan and guarantee agreements on allocation of $524.5 million worth syndicated loan to Azerbaijan’s Southern Gas Corridor CJSC to support the second stage of development of Shah Deniz gas and condensate field, Trend has learned from Southern Gas Corridor CJSC.
From the Azerbaijani side, the guarantee agreement was signed by the country’s Finance Minister Samir Sharifov and the loan agreement was signed by Director General of Southern Gas Corridor CJSC Afgan Isayev.
Afgan Isayev noted that such leading international financial institutions as the International Bank for Reconstruction and Development, Asia Infrastructure Investment Bank, European Bank for Reconstruction and Development and Asian Development Bank have already provided support to the Southern Gas Corridor project.
Up to now, Southern Gas Corridor CJSC has invested $8.4 billion (or 73 percent) of the total of around $11.5 billion (total funding needs until 2020 inclusively) required for the financing of its participating interests in the Projects, he said.
He noted that the work on Shah Deniz Stage 2 (production of first gas) is 98.5 percent complete, while the work on the South Caucasus Pipeline Expansion project (transportation of first gas) is 99.2 percent complete. Trans Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects are 87.4 percent and 60.8 percent complete, respectively, added Isayev.
The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.
At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.
As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans Anatolian Natural Gas Pipeline and Trans Adriatic Pipeline.