Europe becomes closer to Azerbaijani gas
Azerbaijan, Baku, Oct. 26 / Trend /
Trend Agency expert Seymur Aliyev
Azerbaijan and Turkey have recently a package of documents in the gas sector. This has historical importance for these countries, Europe and the Caspian Basin countries. In essence, these agreements, including the most important document on gas transit via Turkey, opened a direct route for Azerbaijani gas to Europe.
Moreover, by signing this agreement, Azerbaijan removed the last obstacles to implement several major energy projects, such as the development of the second stage of the giant field "Shah Deniz", the construction of major export gas pipelines (Nabucco, ITGI, TAP). However, this agreement will facilitate the implementation of such projects as the Trans-Caspian gas pipeline, the development of new gas fields in the Caspian Sea and, especially, in Azerbaijan.
The agreement on gas transit allows Baku to determine the route of transporting gas to Europe. Earlier, "Nabucco", ITGI, TAP pipelines, included in the "Southern Gas Corridor" submitted their proposals to the Shah Deniz partners. A route will be chosen in the nearest future. Afterwards, a sanction will be given to implement Shah Deniz second stage (before the end of this year).
Gas, produced from the field, is considered as the main source for the projects of the Southern Gas Corridor. It is one of the priority energy projects for the EU. It intends to diversify the routes and sources of energy supplies and thereby increase the EU energy security.
Azerbaijan plans to supply 10 billion cubic meters of gas to Europe from 2017 within the Shah Deniz 2 project.
Another 6 billion cubic meters will be delivered to Turkey in addition to 6.6 billion cubic meters within the Shah Deniz first stage of development.
The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants in the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.
Reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas.
Presently gas is transported to Georgia and Turkey via the South Caucasus gas pipeline.
Peak production at the field is projected at 9 billion cubic meters at the first phase.
According to the forecasts, gas production will be brought up to 24 billion cubic meters per year with in the second stage of field development.
However, gas supplies to Europe may begin much earlier. Today, Turkey re-exports part of Azerbaijani gas to Greece. The signing of the transit agreement will allow making direct gas supplies to this country. There is an agreement between the countries participating in this process.
The transit agreement between Azerbaijan and Turkey actually connected Europe and the Caspian region by an energy chain. This agreement opens the way to Europe not only for gas from the Shah Deniz field. Gas from such Azerbaijani big gas fields as "Umid", "Absheron" and other perspective structures may be delivered through this way in the future. This corridor will also transport natural gas from other countries of the Caspian region.
One can say that after signing a transit agreement, Europe has become even closer to Azerbaijan. Brussels is closer to Baku. It is explained by a necessity to diversify energy supplies to the EU to ensure energy security. This is also explained by the fact that Azerbaijan is the only real supplier of natural gas in this direction today. It has large proven gas reserves worth 2.6 billion cubic meters.