Shah Deniz consortium mulling expansion of gas transport infrastructure
BAKU. Nov 5 (Interfax) - The Shah Deniz consortium is considering the expansion of the gas transport infrastructure on Azerbaijan's and Georgia's territory to deliver Azeri gas from Stage-2 of the Shah Deniz project, Vagif Aliyev, the chief of the investment directorate of the State Oil Company of Azerbaijan (SOCAR), told journalists on Saturday.
"The construction of a new gas pipeline or the expansion of the existing gas transport infrastructure [the South Caucasus Trunk Pipeline] is under consideration. Whether a new gas pipeline will be built in Azerbaijan or in Georgia and in which of these countries the existing gas pipeline will only be expanded are technical details, and they are being discussed," Aliyev said.
To ensure exports of Azeri gas from Stage-2 to foreign markets, capacity of the gas transportation infrastructure in Azerbaijan and Georgia should be increased at least to 16 billion cubic meters, he said.
"We actually have the desire to resolve the issue of transportation of future volumes of Azeri gas, that is, to provide conditions for exporting large amounts of gas from Azerbaijan in the future," he said.
A decision on building a new gas pipeline or expanding the existing one should be made before a final decision is made on financing Stage-2.
BP-Azerbaijan President Rashid Javanshir had said earlier that gas exports from Stage-2 would require the construction of a new 400-kilometer long gas pipeline capable of handling 16 billion cubic meters of gas and the expansion of the South Caucasus Trunk Pipeline in Georgia by building two new compressor stations there, as complicated terrain in that country prevents the construction of a new gas pipeline there.
The construction of a new gas pipeline and the expansion of the existing one could cost about $3 billion, he said.
The throughput capacity of the South Caucasus Trunk Pipeline connecting Baku, Tbilisi and Erzurum is 8 billion cubic meters.
The contract on the development of the Shah Deniz field was signed in Baku on June 4, 1996 and was ratified by the Azeri parliament on October 17, 1996. The Shah Deniz project members are BP (operator, 25.5%), Statoil (25.5%), SOCAR (10%), Lukoil (10%), NICO (10%), Total (10%), and TPAO (9%).
The cost of Stage-2 is estimated at $20 billion. The shareholders are supposed to make a final decision on financing Stage-2 in 2013.
Gas production at Stage-2 is expected to start in 2017. The annual production volume should be 16 billion cubic meters of gas.