14 Mar 2023 13:32

EBRD prepared to help finance expansion of Southern Gas Corridor

BAKU. March 14 (Interfax) - The European Bank for Reconstruction and Development (EBRD) is prepared to consider participating in the financing of the project to expand the Southern Gas Corridor (SGC), the head of the bank's office in Azerbaijan, Kamola Makhmudova said.

The EBRD expressed a willingness to consider the project to expand the SGC to increase Azerbaijan's gas exports on three main conditions: that a feasibility study be prepared, that the project be consistent with the goals of the Paris climate agreement, which Azerbaijan signed, and that it must comply with all EBRD environmental standards, Makhmudova said an interview with Azerbaijan's CBC TV channel.

She said the feasibility study will be ready in the spring and then the bank will sit down at the negotiation table. The bank welcomes this project, she said, adding that the bank has the support of the European Union, so it is prepared to support it.

The EBRD approved a loan of $500 million in 2018 for the construction of the Trans Adriatic Pipeline (TAP), a component of the SGC along which Azerbaijan supplies gas to Europe.

The main elements of the SGC are the Stage 2 development of the Shah Deniz field, expansion of the South Caucasus Baku-Georgia-Turkish border gas pipeline, construction of the Trans-Anatolian gas pipeline (TANAP) from the eastern to the western border of Turkey and the TAP linking Greece, Albania and southern Italy. The cost of the project was initially estimated at $45 billion, but it ultimately cost only $33 billion.

Azerbaijan began exporting gas to Europe on December 31, 2020. Customers in the EU now include Italy, Greece, Bulgaria and Romania, but there are other countries that want to buy gas from Azerbaijan.

Azerbaijan increased gas exports by 18% to 22.3 billion cubic meters in 2022, with exports to Europe jumping 39% to 11.4 bcm, or 51% of the total. The country plans to export more than 24 bcm in 2023, about half of which will go to Europe.

Under an agreement with the EU, Azerbaijan's gas exports to Europe are supposed to grow to 20 bcm by 2027. With this aim in mind, there are plans to double the capacity of the gas pipelines that are part of the SGC: TANAP from 16 bcm to 32 bcm per year, and TAP from 10 bcm to 20 bcm.