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


Business Trends: China pushes shale gas drilling amid corporate shakeups
-Adrienne Blume
In what appears to be a move to increase domestic energy production and self-reliance, as well as boost competition among foreign companies, China is reorganizing its state-owned energy firms and widening the invitation to shale gas drillers.
Editorial Comment: A brighter future for methane hydrates?
-Adrienne Blume
Methane hydrates are three-dimensional ice-lattice structures in which natural gas is trapped.
Executive Viewpoint: Innovative DCS targets biogas, LNG applications
-Jani Hautaluoma
New technologies, both process and digital, are revitalizing the hydrocarbon processing industry. Gas Processing & LNG talked with Jani Hautaluoma, Director of Process Automation for Valmet Automation, about the application of new production processes and digital advances for biogas and LNG production.

Best Practices in Supporting Front Line HPI Operations Remotely in Response to Covid-19

Register Now

To ensure employee safety, HPI companies had to quickly pivot to a remote support model with many subject matter experts (SMEs) and engineering staff working remotely supporting front line, sequestered critical operations and field operators.

What are the best practices and lessons learned from this new remote operational support model? What have been technologies and work processes that are enabling effective and efficient remote operational support? Is this the “new norm” going forward even when the impact of Covid-19 abates? If not, how will remote support of critical operations be changed?

If this topic and questions are of interest to you and your organization, please attend this special HPI webinar with a panel of leading industry customer experts who will discuss their perspectives. Attendees will have the opportunity to ask questions for the panelists.

May 18, 2020 10:00 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.
© 2020 Gulf Publishing Holdings LLC.