Gas deals with Turkey should help Shah Deniz partners make final Stage-2 investment decision
BAKU. Oct 26 (Interfax) - The documents Azerbaijan and Turkey signed on Tuesday concerning the sale and transit of Azerbaijani gas will help Shah Deniz project shareholders make a final investment decision on implementing Stage-2 of the gas field's development, head of the BP-Azerbaijan PR department Tamam Bayatly told Interfax.
"The Shah Deniz project partners welcome the signing of the gas agreements by Azerbaijan and Turkey. We think that these documents will help in the continuation of efforts by the company BP and its partners in the Shah Deniz project to make a final investment decision on implementing Stage-2 and Southern Corridor projects," Bayatly said.
These agreements, she said, will also make it possible for the Shah Deniz consortium to continue the process of selecting a gas pipeline for the exportation of Azerbaijani gas to Europe, as well as to confirm gas sales agreements with potential buyers.
State Oil Company of the Azerbaijani Republic (SOCAR) President Rovnag Abdullayev and the executive director at the Turkish company Botas, Fazil Senel, signed a gas-purchase agreement on Tuesday. Senel and BP-Azerbaijan President Rashid Javanshir signed a gas-transit agreement.
The three also inked an Azerbaijani-Turkish intergovernmental framework agreement.
The signing of these documents yesterday determines the legal framework for the purchase and transit of Azerbaijani gas in the context of Shah Deniz Stage-2 development. They were signed in Izmir, Turkey after the first meeting of a high-level Azerbaijani-Turkish strategic cooperation council.
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 development contract was signed on June 4, 1996.
Stage-1 development of the deposit involves the production of 178 billion cubic meters (bcm) of gas and 34 million tonnes of condensate. This phase of development includes agreements struck on sales of gas between Turkey, Georgia, and Azerbaijan. The 690-km pipeline was built to move Azerbaijani gas to Turkey (442 km in Azerbaijan and 248 km through Georgia).
The cost of Stage-2 is estimated at $20 billion. Annual extraction volume will be 16 bcm of gas. Initial Stage-2 output was planned for 2012, but in light of unresolved gas-transit issues, the timeframe has been extended to 2017.