Azerbaijan allocates $2.1 bln in funds to the Southern Gas Corridor in 2015
Azerbaijan approved putting $2.1 billion investment in Southern Gas Corridor in 2015.
Some $1.273 billion will be allocated from State Oil Fund of the Republic of Azerbaijan (SOFAZ)and the remained value will be supplied from the government budget.
Azerbaijani government announced that SOFAZ should put investment in several big projects, including financing of Azerbaijan's share in the "Southern Gas Corridor" projects.
Southern Gas Corridor includes South Caucasus Pipeline (Azerbaijan-georgia), Trans Anatolian Pipeline (Inside Turkey) and Trans Anatolian Pipeline (Greece, Albania, Italy). Azerbaijan is a shareholder in all of these projects.
The $2.1 billion funds will be allocated to develop Shah Deniz Stage 2 gas field, as well as construction of 335 km of pipeline inside Azerbaijan’s territory until its borders with Georgia.
Piping inside Azerbaijani lands are expected to start in the second half of 2015. The pipeline in Georgia is ready, just needs two pump stations. The initial capacity of delivering gas through Azerbaijan-Georgia (South Caucasus Pipeline) will be 16 billion cubic meters per annum (bcm/a) and would reach to 31 bcm/a until 2018. The equipments for Georgian sector is expected to need $2 billion to 2.5 billion investment.
This pipeline would connect to Trans Anatolian Pipeline (TANAP) and then will join to Trans Adriatic Pipeline (TAP) – Greece, Albania, Italy.
It is expected that Turkey and Europe receive 6 bcm/a and 10 bcm/a respectively from Shah Deniz Stage 2 gas field by 2020.
The Southern Gas Corridor (SGC) is a term used to describe planned infrastructure projects aimed at improving the security and diversity of the EU’s energy supply by bringing natural gas from the Caspian region to Europe.
The Southern Gas Corridor is one of the most complex gas value chains ever developed in the world. Stretching over 3,500 km, crossing seven countries and involving more than a dozen major energy companies, it is comprised of several separate energy projects representing a total investment of approximately US$45 billion (including the development of Shah Deniz Stage 2 project).
lham Shaban is Director of the Azerbaijan Centre for Oil Studies, in Baku.