ADB al­lo­cates $524.5M loan on Shah Deniz 2

Azer News - - Business - By Sara Is­rafil­bay­ova

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 de­vel­op­ment of Shah Deniz 2 gas and con­den­sate field.

Di­rec­tor Gen­eral of South­ern Gas Cor­ri­dor CJSC 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.

To date, 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.

Isayev went on to say 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, he added.

The South­ern Gas Cor­ri­dor, worth $41.5 bil­lion, is one of the pri­or­ity projects for the EU and pro­vides for the trans­porta­tion of 10 bil­lion cu­bic me­ters of Azer­bai­jani gas from the Caspian re­gion through Ge­or­gia and Turkey to Europe.

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 (TANAP) and Trans Adri­atic Pipe­line (TAP).

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.

TAP will con­nect to the TANAP on the Turk­ish-Greek bor­der, run through Greece, Al­ba­nia and the Adri­atic Sea, be­fore com­ing ashore in Italy’s south.

TAP will be 878 kilo­me­ters in length (Greece 550 kilo­me­ters, Al­ba­nia 215 kilo­me­ters, Adri­atic Sea 105 kilo­me­ters, and Italy 8 kilo­me­ters).

TAP’s share­hold­ing is com­prised of BP (20 per­cent), SOCAR (20 per­cent), Snam S.p.A. (20 per­cent), Fluxys (19 per­cent), Enagás (16 per­cent) and Axpo (5 per­cent).

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