Azerbaijani Economy 14 february — 13:36

SOCAR tells when TAP going to be ready

209

A 25-year supply contract has been signed with Italy, and the first Azeri gas is expected to start flowing before the end of 2020, Vitaly Baylarbayov, deputy vice president of SOCAR, the State Oil Company of Azerbaijan, told in an interview to EUROACTIV.

The construction of the so-called “Southern Gas Corridor”, a chain of pipelines linking Azerbaijan to Italy, has cost $40 billion and the project is “almost ready,” told Baylarbayov.

The Southern Gas Corridor’s main source of supply is the Shah Deniz field, located in the economic zone of Azerbaijan in the Caspian Sea. The project consists of three pipelines with a total length of almost 4,000 km: The South Caucasus Pipeline (SCP) linking Azerbaijan with Georgia, the Trans-Anatolian Pipeline (TANAP) across Turkey, and the Trans-Adriatic pipeline (TAP) linking Greece, Albania and Italy with an offshore section.

The total value of works for the entire Southern gas corridor is close to $40 billion, the SOCAR executive said, adding that “substantial savings” were made during the works in Azerbaijan and Turkey. Previous estimations had put a price tag of $45 billion for the entire project.

Baylarbayov said that onshore work is 100% complete in Azerbaijan, in Georgia, TANAP on the territory of Turkey is also 100% complete and on 30 November the completion and readiness for supplies to Europe was inaugurated in Turkey in the presence of Presidents of Azerbaijan and Turkey.

Sixteen wells have been drilled in the Shah Deniz gas field and are now fully ready for operations, he said, explaining that gas will start flowing at full capacity once works on the final stretch  of the Italian pipeline is completed. Eight of the wells are producing already and their gas is flowing to Azerbaijan, Georgia and Turkey. The rest will be gradually put onstream with full capacity once works on the final stretch in Italy are fully completed.

“The only remaining part of the corridor is TAP, the readiness of which is 91%,” the SOCAR executive said.

But this last 8 km stretch on Italian territory is also the most sensitive politically. The local population have resisted the pipeline, fearing for their pristine beaches and tourism industry.

According to Baylarbayov, a micro-tunnel allowing the pipeline to avoid the beach of San Foca, the landing point in southern Italy, has now been completed. The conservative timing to make TAP operational was the end of 2020 – possibly earlier than that, he said.

“Whatever we do on the territory of Italy is done with the absolutely highest level of environmental precaution, which is not less strict on the territory of Azerbaijan, Georgia, Turkey and Greece,” the executive insisted.

What could still delay construction were for example new archaeological discoveries, he explained. Multiple sites were discovered during the construction phase of the pipeline in Turkey and Greece. Whenever this happened, work was stopped and the authorities were invited to step in, Baylarbayov explained.

Regarding the volumes of gas expected in each section of the pipeline, Baylarbayov said Turkey is already receiving gas from 1 July 2018. It received about 2bcm in 2018, about 4bcm in 2019, and in 2020 the supplies should be about 6 bcm. This is in addition to the 6 bcma which Shah Deniz supplies from the Stage 1 of its development.

Furthermore, 2 bcm have been earmarked for Greece and Bulgaria. The volumes will be delivered once TAP enters operation, and when the Greece-Bulgaria interconnector is  completed, by the end of 2020.

The SOCAR executive explained that the entire TAP system will be made operational in one go. For Italy, supplies are earmarked at 8+bcm/y, he said.

“All the buyers are lined up, waiting for the supplies. Hopefully there will be no further obstacles,” he said.

Asked if Southern gas corridor was in competition with Turkish stream, he said this was a question asked by many journalists and the answer was always NO.

“Our volumes, contracted to Greece, Bulgaria and Italy for 25 years, will start arriving to Italy as soon as TAP is ready. This cannot be changed. Whether there will be Russian, Libyan, Algerian or any other gas, it doesn’t matter, because we secured our own place”.

Asked if the 16 wells in Shah Deniz he referred to are enough to supply the 8 bcm/y for Italy plus the 2 bcm/y for Greece and Bulgaria, and also 6 bcma to Turkey, he said that the answer was affirmative, but as their production decline over time, others will be drilled. He also mentioned, that he strongly believes in to the huge potential of Shah Deniz which will justify its 3d and even 4th Stages of further development. He also mentioned huge potential of other Azerbaijani fields which are already under exploration and development.

Latest news