BP Azerbaijan head: Gas agreements between Azerbaijan and Turkey to help open Southern Gas Corridor to Europe

Azerbaijan, Baku, Oct.28 / Trend E.Ismayilov /

The Republic of Azerbaijan and the Republic of Turkey have signed a number of key gas export related agreements to enable Turkey to buy gas from Azerbaijan and to transit Azerbaijan gas through Turkey to Europe, official website of the State Oil Company of Azerbaijan (SOCAR) reports.

According to the report, the documents signed in Izmir (Turkey) on Tuesday, October 25, included an Intergovernmental Agreement (IGA) between the Government of Azerbaijan and the Government of Turkey, Gas Sales Agreements between SOCAR and BOTAS and also between the Azerbaijan Gas Supply Company (AGSC) and BOTAS International Limited (BIL), a Gas Transit Agreement between SOCAR and BOTAS and a Framework Agreement (FA) setting the general terms and conditions for transit of gas sourced from Azerbaijan through the territory of Turkey. The IGA and FA contemplate transit through Turkey either via an upgrade to the existing BOTAS transmission network or via the development of a new-build pipeline across Turkey.

The execution of the documents was witnessed by the President of the Republic of Azerbaijan H.E. Ilham Aliyev and the Prime Minister of the Republic of Turkey Recep Tayyip Erdogan. The documents were signed by the Minister of Industry and Energy of Azerbaijan Natig Aliyev and the Minister of Energy and Natural Resources of Turkey Taner Yildiz, as well as SOCAR President Rovnag Abdullayev, the President for the Azerbaijan-Georgia-Turkey Region of BP and the Operator of Shah Deniz field, Rashid Javanshir and General Manager of BOTAS Fazil Senel.

The agreements provide a legal framework to regulate the sale of Shah Deniz gas to Turkey and its transportation to European markets through Turkey, the website reports.

“We are pleased to finalise the signing of these key agreements between Azerbaijan and Turkey that will lead to Shah Deniz full field development and delivery of Stage 2 gas from Azerbaijan’s giant field in the Caspian Sea to Turkey and European markets. This is a significant step that has been achieved by the two Governments with support from all parties involved including the Shah Deniz consortium. We believe the success of all efforts that have brought us to today’s achievement lies in the close partnership among the three key parties – the Government of Azerbaijan, the Government of Turkey and the Shah Deniz consortium. This partnership has been a key element in everything accomplished so far and will continue to be a driving force to move Shah Deniz to the stage when it will safely and reliably supply Azerbaijan gas to Turkey and Europe,” SOCAR President Rovnag Abdullayev said.

Speaking on behalf of the Shah Deniz consortium Rashid Javanshir, President for the Azerbaijan-Georgia-Turkey Region of BP, said: “We welcome the successful signing of the Shah Deniz gas sales and transit agreements, and the Inter-Governmental Agreement between Azerbaijan and Turkey. We believe these agreements will help open a Southern Gas Corridor to Europe and link Azerbaijan and Turkey with yet another strategic partnership. They will support the continued development of Shah Deniz 2 project towards a final investment decision and development of Turkey as an energy hub for Europe. The signing of these agreements will also allow Shah Deniz to proceed with its European pipeline selection process, and to confirm gas sales agreements with potential customers. ‪

On behalf of the co-venturers we would like to congratulate Azerbaijan and Turkey on reaching these extremely important agreements”.

Shah Deniz Stage 2, or Full Field Development (FFD), is a giant project that will bring gas from Azerbaijan to Europe and Turkey. This will increase gas supply and energy security to European markets through the opening of the new Southern Gas Corridor.

The project is expected to add a further 16 billion cubic meters per year (bcma) of gas production to the approximately 9 bcma from Shah Deniz Stage 1. “It is one of the largest gas development projects anywhere in the world,” the website reports.

Plans for the project include two new bridge-linked offshore platforms; 26 subsea wells to be drilled with 2 semi-submersible rigs; 500 km of subsea pipelines built at up to 550m water depth; additional export capacity in Azerbaijan and Georgia; expansion of the Sangachal Terminal.

“Proposals for the transportation of gas from the Caspian Sea to Europe are now being evaluated by the Shah Deniz consortium with an award expected around the end of the year,” the report says.

Proposals were submitted by October 1 from Nabucco, Trans-Adriatic Pipeline and IGI-Poseidon.

In addition, the Shah Deniz project team are also evaluating a fourth potential export option which would transport gas to markets in South-Eastern Europe through a system of regional existing and future interconnector infrastructure.

The partners in Shah Deniz are: BP Operator (25.5 per cent), Statoil (25.5 per cent), SOCAR (10 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent).

via BP Azerbaijan head: Gas agreements between Azerbaijan and Turkey to help open Southern Gas Corridor to Europe – Trend.