Azeris Provide SGC Investment Update

Azerbaijan state-owned Southern Gas Corridor Company (SGCC) has spent $9.2bn of the total needed $11.5bn investment share on the project as of June 30, its CEO Afgan Isayev told NGW August 3.

This indicates it invested $600mn in first half 2018.  SGCC said at the start of this year that it would spend $1.3bn in the whole of 2018.

Investments of all parties into the Southern Gas Corridor (SGC) project has reached $31.2bn, Isayev said (see detailed table below).

Operator BP and partners announced June 30 the start-up of Shah Deniz 2 in the Azerbaijan part of the Caspian Sea, including its first commercial gas delivery via Tanap to Turkey. The first stage of the 2,000-km SGC, from the Caspian shores in the east to the northwest Turkish city of Eskiseher, started flows May 29 in Baku, while an opening ceremony for Tanap was also held at its Eskisehir offtake point June 12.

As of June 30, about 95.3% of the Trans Anatolian pipeline (Tanap) and 76.4% of the TransAdriatic pipeline (TAP) was completed, says SGCC.  The project is aimed to export 16bn m³/yr gas to Turkey - of which 10bn m³/yr to the EU – of Shah Deniz stage 2 gas (SD2) by 2020 initially. The pipe is expected to reach its final 31bn m³/yr capacity in mid-2020s.

Azerbaijan has 16.7% share in SD2 and SCPX, 58% in Tanap as well as 20% stake in TAP. 

Isayev said as of June 30, SGCC had attracted funds from the following sources to finance its share in the project: bonds for $2.5bn, issued by SGC and purchased by the State Oil Fund of Azerbaijan; authorised capital of $2.4bn, provided by Azerbaijan’s economy ministry and state-run Socar;  eurobonds with a nominal value of $1bn (first issue) in March 2016 and another issue of eurobonds with a nominal value of $1bn (second issue) in March 2017; loans from Asian Infrastructure Investment Bank ($0.6bn), European Bank for Reconstruction and Development ($0.5bn), World Bank's International Bank for Reconstruction and Development ($0.4bn); also the Asian Development Bank (ADB) lent $0.5bn and guaranteed a $0.5245mn syndicated loan; while the World Bank’s Multilateral Investment Guarantee Agency (MIGA) guaranteed a $0.75bn syndicated loan.

Spends As Of June 30 In SGC Project As Of June 30 

Source: SGCC documents seen by NGW