Shahdaniz export route to be picked by year-end

Shahdaniz export route to be picked by year-end

The international consortium developing Azerbaijan’s major Shahdaniz gas-condensate field in the Caspian Sea will determine the pipeline that will pump gas to Europe by the end of 2011, an official of the project operator BP Azerbaijan said Wednesday.

Richard Taus, the company’s head of finance, told a conference, World Gas Infrastructure 2011, in Baku that pipeline projects are expected to submit their proposals on fees and terms of transporting gas by October 1. “We will make our choice by the year-end,” he said.

Taus said three options for gas exports are under consideration – the Nabucco pipeline, Interconnector Turkey-Greece-Italy (ITGI) and Trans Adriatic Pipeline (TAP), the projects that are part of the EU-backed Southern Corridor aiming to diversify energy supply routes and sources for European nations.

“The route will heavily depend on gas transit agreements to be reached with [Turkish] Botas company,” Taus said. “Talks have already been held with 14 potential buyers in Europe. The consortium has also negotiated with customers in Bulgaria, Romania, Hungary and Croatia.”

The BP Azerbaijan official noted further that gas production under the second stage of tapping the Shahdaniz field will begin in 2017.

“Two years later, production will reach 16 billion cubic meters per year. 6bn cubic meters of the volume will be delivered to Turkey, while the rest will be transported to Europe. Gas production will peak until 2027 at 24bn cubic meters per year. This will be followed by a gradual reduction in output.”

Taus added that $20 billion is required for implementing Phase 2 of Shahdaniz development.

The Shahdaniz field holds estimated reserves of 1.2 trillion cubic meters of gas.

Shahdaniz shareholders are: BP (25.5 percent), Statoil (25.5 percent), NICO (10 percent), Total (10 percent), Lukoil (10 percent), TPAO (9 percent) and Socar (10 percent).



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