Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC

Azeri gas for Europe from Shah Deniz II delayed to Oct 2020-TANAP head

BAKU, Nov 1 (Reuters) - Gas from Azerbaijan's giant Shah Deniz field is not expected to reach Europe before October 2020 due to delays in finishing the TAP pipeline in Italy, the head of the Trans-Anatolian Natural Gas Pipeline (TANAP) consortium told Reuters.

TANAP, a 1,850 km pipeline through Turkey, is a part of the Southern Gas Corridor, carrying gas from Azerbaijan's Shah Deniz II field. It also includes the South Caucasus Pipeline (SCP) extension through Georgia and the Trans-Adriatic Pipeline (TAP) to Greece, Albania and Italy.

The Shah Deniz I field has been pumping gas since 2006, selling it to neighbouring Georgia and Turkey, while output from Shah Deniz II is expected to reach 16 billion cubic metres (bcm) of natural gas per year by 2021, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

"Commercial deliveries of Azeri gas to Europe can begin no earlier than Oct 2020, since the construction work on the TAP pipeline can be completed by this date," Saltuk Duzyol told Reuters in an interview.

Developing the $40 billion Southern Gas Corridor is a major step in European Union efforts to secure gas supplies and reduce its dependence on existing sources such as Russia and Norway.

Parts of the corridor in Georgia and Turkey are completed and the first commercial deliveries of gas from Shah Deniz II to Turkey began in July 2018, although the TAP project, which includes Britain's BP, Italy's Snam and Spain's Enagas, has faced delays to construction due to environmental issues.

Completion was expected by early 2020, although Duzyol said the TAP consortium faced "some technical difficulties as well as other non-technical issues that affected their success".

Duzyol said that if the pipeline system was not operational by July 1 next year, the TANAP consortium had the right to invoice Azerbaijan Gas Supply Company (AGSC), which handles gas sales from Shah Deniz.

AGSC was established by Azeri state energy firm SOCAR and its partners in the Shah Deniz project.

"It is not TANAP, but the other parties that have not yet reached project completion," he said. "Commercially, according to our gas transportation agreements, we are entitled to issue invoices starting from July 1 next year."

Under the Shah Deniz II gas sales deal, AGSC has to pay fines to gas buyers if they do not get supplies by July 1, 2020.

Duzyol said gas volumes had been supplied to Turkey gradually, starting with 1.9 bcm a year, rising to 5.7 bcm by June 2021. He also said capacity could be boosted to 31 bcm by adding compressor stations along pipeline.

He added that 2.7 bcm was delivered to Turkey from June 2018 until Sept. 30 this year.

Duzyol said TANAP shareholders were expected to get $1.45 billion in annual income over 15 years.

TANAP's shareholders are Azeri state energy company SOCAR (51%), Turkish firm Botas (30%), BP (12%) and SOCAR Turkey (7%).

(Writing by Margarita Antidze; editing by David Evans)

Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Editorial Comment
-Adrienne Blume
The continued expansion of natural gas trade is led primarily by growth in the LNG sector, which has tripled over the past 3 yr.
Industry Focus: The future of gas-to-power projects in Africa
-Shem Oirere
Natural gas is expected to play a central role in supporting Africa’s drive to achieve electricity connection for nearly 600 MM people without access to the grid, to reduce widespread reliance on coal for power generation, and to fast-track the continent’s slowed industrial expansion.
Regional Focus: Gazprom faces challenges for combined LNG/processing plant in Baltics
-Eugene Gerden
Russia’s largest natural gas producer, Gazprom, aims to build a giant project on the Russian Baltic seaport of Ust-Luga. The plans include the construction of a combined LNG and gas processing plant.

GasPro 2.0: A Webcast Symposium

Register Now

Following on the heels of the highly successful GasPro 2.0 Webcast Symposium in October 2018, the second GasPro Webcast Symposium 2.0 will take place on October 24, 2019.

The 2019 web event will gather experts in the fields of LNG, gas processing, and gas transport/distribution to share their operations expertise, engineering and design solutions, and technology advances and trends with our audience.

Attendees will learn about technology and operational solutions and deployments in a number of areas: plant design and expansion, construction, NGL production, optimization, sulfur removal, marine operations and separation technology.

October 24, 2019 08:30 AM CDT

Register Now


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2019 Gulf Publishing Holdings LLC.