President Aliyev: Opening of Southern Gas Corridor is timely and wise step
Marking the opening ceremony of the Southern Gas Corridor today, on this historic day, we see how timely and wise this step is, Azerbaijani President Ilham Aliyev said.
He made the remarks at the official inauguration ceremony of the first phase of the Southern Gas Corridor project, which implies the supply of Azerbaijani gas to Europe, in the Sangachal terminal in Baku on May 29.
“Azerbaijan’s successful oil and gas policy shows that the Azerbaijani people are able to use their natural resources only in conditions of independence. The oil history in the world originates from Azerbaijan. In 1846, for the first time ever, oil was extracted through an industrial method in Azerbaijan, in Baku,” he said.
The head of state recalled that the monument in honor of this historic event was erected several years ago in the center of our city.
“Azerbaijan ensured most of the world's oil production during that period in the second half of the 19th century and the beginning of the 20th century. But could Azerbaijani people benefit from this? Of course not. It's enough to look at the pictures and statistics of that time, to see that people lived in poverty. There was no industrial development whatsoever. Azerbaijan was only a resource, and the "black gold" extracted from the country's depths didn't serve the development of the Azerbaijani people. Our oil resources were getting drained. The oil revenues were not directed towards welfare of Azerbaijani people,” he said.
At the same time, we faced big environmental problems in the Absheron peninsula, President Aliyev noted.
“Today, these problems are being solved by independent Azerbaijan. Today, independent Azerbaijan and our successful oil and gas policy show that only in conditions of independence, during the period of independence, Azerbaijani people can use their natural resources. Azerbaijan can successfully develop only in conditions of independence,” he added.
“Today, as an independent country, we stand firmly, and successfully fulfill all the tasks set before the country. Such giant projects we realize together with our partners, and re-create the energy map of Europe,” said the president.
Ilham Aliyev reminded that the term of “The Contract of the Century”, signed 24 years ago, was extended in 2017 until 2050.
“This proves that there are big oil reserves in this field. “The Contract of the Century” breathed life into Azerbaijan, and served the country's revival. For the first time, the Caspian Sea opened up and became available to foreign companies,” said President Aliyev.
He went on to note that today, the implementation of “The Contract of the Century” goes on very well, and after the signing of this contract, Azerbaijan's new oil strategy began to take shape.
“I remember those historical days very well, because as vice-president of the State Oil Company I was directly involved in this work. At the time, Azerbaijan's oil strategy was established, and today we see the results of this strategy and the carried out work. After 1994, the second big contract on Shah Deniz gas field was signed. I must note that this contract was signed in early June 1996, exactly on the opening day of the Caspian Oil and Gas exhibition. Thus, Azerbaijan presented itself to the world not just as an oil, but as a gas country as well,” Ilham Aliyev noted.
“I also remember well that during that period the gas factor did not play such a significant role in energy security in the world. Even the development of gas fields didn't get much of interest, because compared to oil fields, the revenues were lower. Thus, attracting investors to this project wasn't so easy,” he said.
President Aliyev went on to say that in 1997 as a result of "The Contract of the Century" first oil was extracted from the Chirag platform.
“It was really a historic day. For the first time, foreign companies extracted oil from a new field in the Caspian Sea. Today, marking the opening ceremony of the Southern Gas Corridor, we see how timely and wise this step is. The Shah Deniz gas field is the main resource base of the Southern Gas Corridor,” he said.
Ilham Aliyev added that Azerbaijan is a country with no access to the high seas.
“Therefore, oil pipelines must have been built, and the first oil pipeline, Baku-Supsa, was commissioned in 1999,” he said. “It shows that in a short time we carried out this amount of work, and this also requires big financial resources, these projects are also very difficult to implement in technical terms," he said.
"I must say that we didn’t have a lot of money in 1999. The Baku-Tbilisi-Ceyhan oil pipeline was commissioned after this. So, the implementation of these projects really required great efforts and great wisdom. With the launch of the Baku-Supsa oil pipeline, for the first time in history, we linked the Caspian and the Black seas by an oil pipeline. After this, in 2002, expecting big volumes of oil from the AzeriChirag field, we laid the foundation of the Baku-Tbilisi-Ceyhan oil pipeline exactly here, on the territory of the Sangachal terminal. It was commissioned in 2006 and serves the Azerbaijani people and all the friendly countries.”
The Azerbaijani president added that presently, not only Azerbaijani oil, but also oil from other countries is transported via the Baku-TbilisiCeyhan oil pipeline.
“Oil produced on the Caspian Sea by other countries, oil produced on the eastern shores of the Caspian Sea is already supplied through this pipeline to global markets, and Azerbaijan demonstrates its capabilities to neighboring countries at the same time as a reliable transit country,” Ilham Aliyev said.
“The Baku-Tbilisi-Erzurum gas pipeline was commissioned in 2007. This is also a very important project, and the development of the Shah Deniz field would have been impossible without this project. Thus, for the first time, in 2007, Azerbaijani gas started to be transported to Georgia and Turkey. I also remember that day very well, I remember the ceremony in Ceyhan very well. When I was heading here today, all these historic moments, those days revived in my memory, and I would like to say once again that all these are truly historic achievements,” President Aliyev said.
He went on to say that Azerbaijan then started taking steps regarding future development of the Shah Deniz field.
“Of course, we all knew that a gas pipeline was needed to bring large volumes of Azerbaijani gas to global markets, and thus, practical work was launched to create the Southern Gas Corridor. A very serious work was carried out and negotiations were held. Finally, in 2012, Azerbaijan and Turkey signed an agreement on the Trans-Anatolian Natural Gas Pipeline - TANAP, and thus a powerful impetus was given to the implementation of the Southern Gas Corridor,” the President said.
U.S. Deputy Assistant Secretary of State in the Bureau of Energy Resources Sandra Oudkirk, UK Prime Minister's Trade Envoy to Azerbaijan Baroness Emma Nicholson, Ambassador Erkan Ozoral, OPEC Secretary General Mohammad Sanusi Barkindo, Secretary General of the Gas Exporting Countries Forum Yury Sentyurin, and BP Chief Executive of Upstream Bernard Looney also attended the opening ceremony and made speeches there.
The U.S. has strongly supported the Southern Gas Corridor project, from the very beginning of its implementation, realizing the key role of this corridor in diversifying the routes of energy supplies to Europe, Sandra Oudkirk said.
“I congratulate President of Azerbaijan Ilham Aliyev and representatives of all countries and companies that are working hard in the framework of the Southern Gas Corridor Project,” she said.
Oudkirk then stressed that the Southern Gas Corridor provides new opportunities for more extensive economic integration of the countries of the Caspian region.
“U.S. President Donald Trump has repeatedly stated his support for this project. In his recent letter addressed to the President of Azerbaijan 100th anniversary of the Azerbaijani Democratic Republic, he also stressed that the Southern Gas Corridor is an incredible achievement that will ensure the energy security of Europe,” she said.
Oudkirk also noted that the Southern Gas Corridor provides opportunities to expand development and cooperation for the countries of the region, as well as to increase the volumes of gas supplied from the Eastern Mediterranean, Central Asia and the Caucasus to Europe.
“The U.S. plans to continue cooperation with all participants of the Southern Gas Corridor, which serve as sources of long-term success for this project,” she added.
The oil and gas industry remains the cornerstone of UK’s commercial relations with Azerbaijan, the UK Prime Minister's Trade Envoy to Azerbaijan, Turkmenistan and Kazakhstan Baroness Emma Nicholson said at the commissioning ceremony.
“This year marks the completion of another milestone of energy collaboration. The first gas from BP's Shah Deniz-2 platform will flow through the Southern Gas corridor network of pipelines into Turkey. This is a major step forward towards realizing the vision of delivery of great energy security to Europe. And together we have created successful partnership in the solid foundation for the future,” she said.
“I am privileged to having been present when BP and SOCAR signed the latest agreement in London,” Nicholson said.
She went on to say that the deepening collaboration can only bring economic benefits for both countries and beyond.
“That's a clear illustration of the importance the UK attaches for growing bilateral and commercial partnership,” she added.
Reading out the address of the British Prime Minister Theresa May to the participants of the event, she said that there are strong and productive relations that extend far beyond the energy sphere between Great Britain and Azerbaijan.
“Together we observed the signing of six production sharing agreements between BP and SOCAR, which is evidence of the incredible partnership established between the two companies in the last quarter of a century. In general, Great Britain and Azerbaijan have built strong and productive bilateral relations, which extend far beyond energy, covering many other spheres. I look forward to strengthening these relationships in the future,” said May.
Then, Turkish Ambassador to Azerbaijan Erkan Ozoral read out the message of Turkish President Recep Tayyip Erdogan to the participants of the event.
Completion of the construction of the Trans-Anatolian pipeline (TANAP), through which gas will be delivered to Turkey and then to Europe, is a very important and significant event, Erdogan stressed.
“Dear President Ilham Aliyev and the participants of the ceremony, after the implementation of such projects as Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum, and the BakuTbilisi-Kars transport corridor, the TANAP gas pipeline can be considered a project that will change the future of the region. TANAP is a good example of regional cooperation,” the message said.
In his address, Turkish President also noted that today, after the first gas is launched into the TANAP system, it will reach Eskisehir on June 12, when the inauguration of TANAP, the Turkish part of the project, will take place.
Erdogan also noted that it would be an honor for Turkey to organize the opening ceremony of the TANAP pipeline in Turkey.
Addressing the event, OPEC Secretary General Mohammad Barkindo noted that the project for development of Azerbaijan’s Shah Deniz gas and condensate field is a project which indeed the world should be proud of.
“It is a great honor and true pleasure for me to be here at the Sangachal terminal on the Caspian Sea to not only witness the opening ceremony of the 25th Centenary Caspian Oil and Gas Exhibition and Conference, but also opening of this magnificent global undertaking, the Shah Deniz project,” Barkindo said.
He went on to say that Shah Deniz is a clear evidence of Azerbaijani President Ilham Aliyev’s visionary leadership, motivation and determination.
This project envisages a huge multi-billion dollar capital investment and is one of the largest energy projects in the world, Barkindo noted.
“This is a significant added value to Azerbaijan’s economy. It is also a testimony to good partnership on the Shah Deniz project operated by BP and including many oil and gas companies from several countries,” he said.
Barkindo further noted that Azerbaijan is one of the consistently highest performing countries in OPEC deal to curb oil output.
He pointed out that Azerbaijan played a pioneering leadership role in getting OPEC and several non-OPEC countries to reach the agreement on reducing oil production.
“We will continue to be grateful for that vision that you expressed several years ago that we need to come together with OPEC and nonOPEC countries. I would like to express thanks for cooperation with OPEC and for your support and commitment to voluntary production adjustments. Azerbaijan is one of the consistently highest performing countries,” the OPEC secretary general added.
Speaking at the event, the Secretary General of the Gas Exporting Countries Forum Yury Sentyurin said that the Southern Gas Corridor project highlights the role of Azerbaijan as an international gas hub.
“Azerbaijan has obtained the status of the international gas hub thanks to the wise and rational policy pursued by President Ilham Aliyev. Natural gas will play a key role in meeting our future energy needs. The Southern Gas Corridor, as one of the largest gas projects in the world, is aimed at ensuring gas supplies from the Caspian Sea to Europe. It involves extensive cooperation between the public and private sector, and today, 7 states and 11 independent companies are working together to complete this major project,” he said.
Sentyurin emphasized that the Southern Gas Corridor is designed to change the energy map of the entire region, delivering Caspian gas directly to European markets for the first time in history.
The secretary general noted that, the European Union needs further diversification of import opportunities to meet its future demands for energy.
“The financial and political commitment of Azerbaijan to the implementation of the project emphasizes the important role that the country plays and will continue to play in the direction of ensuring energy sustainability,” he added.
In his speech, BP Chief Executive of Upstream Bernard Looney stated that British Petroleum will continue cooperation with Azerbaijan.
Touching upon the Southern Gas Corridor, he noted that thanks to it, gas within the second stage of development of the Shah Deniz gas condensate field will go directly to European markets by 2020.
Shah Deniz is one of the largest gas fields in the world and over 24,000 people took part in its development, according to Looney.
Having recalled that this month Azerbaijan celebrates the 100th anniversary since the establishment of the Azerbaijan Democratic Republic, he quoted the words of the head of state that the founders of the ADR would be proud of Azerbaijan if they could see it today.
Looney stressed that there are many reasons for being proud of Azerbaijan and in the future there will be even more.
Later, the video footage about Shah Deniz Stage 2 / Southern Gas Corridor projects prepared by BP was demonstrated. In conclusion, President Aliyev pressed a button symbolizing the launch of the Southern Gas Corridor.
Today, the 25th Anniversary International Caspian Oil & Gas Exhibition has opened as well. The opening ceremony of the first phase of the Southern Gas Corridor was broadcast live in the Baku Expo Center, where the exhibition is being held.
Within the implementation of Shah Deniz Stage 2, 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.
A contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserves are 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), Petronas (15.5 percent), Lukoil (10 percent), NIOC (10 percent) and TPAO (19 percent).
President llham Aliyev took part in the official opening ceremony of the first phase of the Southern Gas Corridor in the Sangachal terminal in Baku on May 29.