Shah Deniz consortium officially announces TAP project
BAKU. June 28 (Interfax) - The Shah Deniz consortium officially announces the Trans Adriatic Pipeline, or TAP, construction project for exporting Shah Deniz deposit Stage-2 development gas to Europe, BP's regional president for Azerbaijan, Georgia, and Turkey, Gordon Birrell, said during a Friday press conference.
For the last two years, the consortium has been examining export routes and has made the right decision, Birrell said. Stage-2 gas will move to Europe via TAP, he said.
There is nine billion cubic meters (bcm) of gas being produced annually at the Shah Deniz deposit, Birrell said. With Stage-2, sixteen bcm will be extracted, ten bcm of which will be sent to Europe.
But Azerbaijan's gas resources will increase further, requiring the building of new interconnector pipelines and gas-transport infrastructure, he said. Providing Azerbaijani gas to Europe requires investment of $40 billion, he said.
Before the end of this year, a decision will be made as to financing for Shah Deniz Stage-2, Birrell said.
The consortium had also been looking at the competing Nabucco West pipeline project.
The Austrian company OMV, the main member of the Nabucco West project, announced this week that the consortium developing the Shah Deniz-2 deposit had selected the TAP for moving gas to Europe.
TAP will be used to transport gas produced under the Shah Deniz Stage 2 project through Greece and Albania to Western Europe. The pipeline will have capacity to ship 10 billion cubic meters (bcm) of gas a year, expandable to 20 bcm depending on the availability of supplies and demand.
The current shareholders in TAP AG are Swiss Axpo (42.5%), German E.ON (15%) and Norwegian Statoil (42.5%). Belgian Fluxys has said it would join the pipeline project if the Shah Deniz consortium selected it.
The contract to develop Shah Deniz was signed on June 4, 1996 in Baku and ratified by the Milli Majlis (parliament) on October 17 of that year. The Shah Deniz project members are BP (operator, 25.5%), Statoil (25.5%), State Oil Company of the Azerbaijani Republic (Socar) (10%), Lukoil (10%), Nico (10%), Total (10%), and TPAO (9%). Stage-2 gas production is planned for 2018. Annual production will run to sixteen bcm. The Stage-2 price tag is estimated at $28 billion.
