Azernews.Az

By Nigar Abbasova

The Shah Deniz Stage 2, one of the largest gas development projects in the world, bears huge importance for Georgia.

Georgian Deputy Energy Minister Mariam Valishvili told Business Time that the expansion of the South Caucasus Pipeline (a part of the Shah Deniz Full Field Development project), as well as the construction of an underground gas storage are priority issues for the development of the Georgian energy market.

“The construction of the gas storage is necessary, as it will allow to oust daytime and seasonal disbalance observed in the country. Gas storages are able to regulate volumes of supplies by accumulating them in the summer season [when consumption is low] and using during peak seasons. Under a contract, inked with the Shah Deniz Consortium, Georgia will lose supplies should it is not able to draw the volumes. Besides, we do not have a right for re-export,” she clarified.

The South Caucasus Pipeline was built to export Shah Deniz gas from Azerbaijan to Georgia and Turkey. The pipeline starts from the Sangachal terminal near Baku and follows the route of the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline through Azerbaijan and Georgia to Turkey, where it is linked to the Turkish gas distribution system.

The expansion project involves the laying of new pipeline across Azerbaijan and the construction of two new compressor stations in Georgia. The project will triple the gas volumes exported through the pipeline to over 20 bcm per year.

Being one of the main components of the large-scale Southern Gas Corridor project, Shah Deniz 2 is expected to add a further 16 bcm per year of gas production to the approximately 9 bcm per year produced by Shah Deniz Stage 1.

"The development of the second stage is a matter of principle, and it is gratifying to know that the process is moving in a scheduled manner. Major portion of the work in our territory has already been completed, and there will be no delay. Production at the field will be launched at the scheduled time and by 2020 we will get additional reserves,” she said.

The total cost of the Shah Deniz 2 project, being developed by a consortium of companies, is expected to hit $25 billion. .

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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