Director of centre of strategic studies: SOCAR "s share in expanded south-caucasian gas pipeline could be increased

"Azerbaijan's aim is to become one of the main players in the European gas market after 2017 when Shah Deniz 2 will come on stream," Farhad Mammadov, Director of the Centre for Strategic Studies of Azerbaijan, said yesterday in his speech at the international conference in Baku devoted to NATO's role in the energy safety.

The Azerbaijani state oil company SOCAR seeks to create reliable, trustworthy and solid access to the World's most lucrative, legally regulated, stable, commercially reliable gas market - namely Europe with its 500 million consumers, he said. Azerbaijan is aiming to penetrate the market with 10 bcm of gas per annum as a first stage of the Southern Gas Corridor after 2017 when Shah Deniz II will come on stream. SOCAR is planning to double its gas export to the European market after 2025 when newly discovered fields currently under exploration will come on stream. Total estimated gas potential is more that 4 trillion cm, proven - 2.5 tcm.

The giant Caspian gas field Shah Deniz has 1.2 tcm of proven gas reserves. SOCAR's exploration of the Umid and Babek fields, along with other possible fields such as Absheron, Nakhchivan, Shafag, Asiman, and Zafar-Mashal - and when combined with the PSAs in- has increased Azerbaijan's gas potential by 3 trillion cubic meters.

Speaking about Azerbaijan's export strategy, Mammadov mentioned that Azerbaijan would like to be involved in the entire chain of the pipelines beginning from the Shah-Deniz field to the final consumer in Europe.

SOCAR would like to expand the current possibilities of the South-Caucasian pipeline and build a new gas pipeline in Azerbaijan. The new system envisages expanding of Azerbaijani gas pumping up to 30 billion cub.m. of gas a year and in the future transport Central Asian gas via it. There are two reasons for this initiative. In 2017 we will need infrastructure to transport the growing gas volume from Shah-Deniz. In the near future gas production in Azerbaijan will reach 50 billion cub.m. a year, considering development of new fields. In addition, expanding of gas transport infrastructure is needed for transportation of Turkmenistan gas via it and implementation of the trans-Caspian gas pipeline.

"Secondly, expanding of the South-Caucasian gas pipeline creates conditions for increase in SOCAR's share in the project," Mammadov added.

On the other hand, Azerbaijan together with Turkey started the trans-Anadolu gas pipeline project (TANAP), which was supported by the Shah-Deniz consortium partners.

SOCAR has invited BP, Statoil and Total to join the project and promised to provide them 29% shares and preserve 51% share. Botas and TPAO Turkish companies have 10% share each.

* The South-Caucasian Pipeline (SCP) from the Sangachal terminal to the Georgian-Turkish border was built in 2004-2006. $1.1 billion has been spent for its construction. The pipeline's length is 680 km and its annual carrying capacity is 7.2 billion cub.m. SOCAR holds 10% share in this pipeline consortium.-0-