Azernews.Az

By Trend

The profitability of the existing/ongoing projects comprising Southern Gas Corridor (SGC) is independent from any third party gas suppliers, said Azerbaijan's Southern Gas Corridor company.

"The SGC is chain of interlinked projects comprising one value chain – the development of Shah Deniz gas and condensate field (the SD project), South Caucasus Pipeline and its Expansion (SCP and SCPX), the construction of Trans Anatolian Pipeline (TANAP ) and Trans Adriatic Pipeline (TAP). These projects are coordinated together, have multiple agreements defining their legal framework and aiding in the achievement of common goals, including the production of gas volumes needed for the fill of all three pipelines, and thus are economically independent of projects outside of this value chain," the company told Trend.

The full-field development of Shah Deniz gas and condensate field or Shah Deniz Stage 2 (SD2 project) is one of the largest and most complex gas projects in the world and the first subsea infrastructure in the Caspian Sea.

"SD2 will add another 16 billion cubic meters of natural gas per annum and up to 105,000 barrels of condensate per day to about 9-10 billion cubic meters of natural gas per annum and up to 45,000 barrels of condensate per day currently produced from Shah Deniz Stage 1 (SD1 project)," said the message. "All of the additional volumes of gas to be produced under SD2 project have already been contracted - 6 billion cubic meters per annum will be supplied to Turkey, while 10 billion cubic meters per annum will go to the European consumers. "

SCPX project will increase SCP’s throughput capacity by 16 billion cubic meters per annum, bringing the overall transportation capacity of the pipeline to circa 23.4 billion cubic meters per annum, reads the message.

The transportation capacity of TANAP system will be equal to 16 bcm per annum as well and since the volume of gas to be supplied to Europe will equal to 10 billion cubic meters, so will be the transportation capacity of TAP, according to the message.

The company stressed that the transportation capacity of the currently constructed pipelines matches the volumes of gas to be produced and supplied under SD2 project.

“The profitability and economy of all Southern Gas Corridor projects were based on these volumes of gas, thus are independent from gas supply from third parties.,” the statement reads.

“Based on the above, even if additional volumes of gas from other potential sources were ready to be supplied to Turkey or Europe via the infrastructure of the Southern Gas Corridor, at the moment there is simply no available capacity for additional volumes of gas.”

However, all three pipelines (SCP, TANAP and TAP) have embedded options for additional expansion if needed: SCP’s and TANAP’s throughput capacity may be further expanded to reach 31 billion cubic meters per annum each, while TAP’s throughput capacity may be increased by an additional 10 billion cubic meters per annum (reaching 20 billion cubic meters per annum).

In case there is firm interest from third parties wishing to supply gas via these pipelines and appropriate agreements in place, based on the relevant decisions of the shareholders at each project level, the new expansion projects may be considered, according to the message from the company.

"If such is the case, the profitability of these new projects will be evaluated accordingly and before the new agreements are signed. As stated above, at this moment the economy of the existing/ongoing projects comprising Southern Gas Corridor is independent from any third party gas suppliers."

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

---

Follow us on Twitter @AzerNewsAz