Intergovernmental agreement on TANAP gas pipeline ready for signing

Next week Turkey and Azerbaijan plan to sign the intergovernmental agreement on the trans-Anatolian gas pipeline (TANAP), which will transport Azerbaijani gas to Europe via Turkey, Turkish officials told Reuters agency.

“The work has entered a final stage. The intergovernmental agreement is expected to be signed next week in Istanbul,” said the same source. Another Turkish official said that the ceremony of signing could take place on June 26 or several days later in presence of Turkish Premier Rejep Tayyip Erdogan and Azerbaijani President Ilham Aliyev.

The intergovernmental memorandum on construction of TANAP pipeline was signed on December 26, 2011. According to the document, the gas pipeline will be operated by the State Oil Company of Azerbaijan (SOCAR) with 80% and Turkish state BOTAS and TPAO will get 10% each. In the future foreign companies could join the consortium at the expense of reduction of SOCAR’s share.

A source from the Azerbaijani government, which is familiar with the negotiations, told Turan that two documents will be signed in Istanbul:

- the intergovernmental agreement on TANAP construction (the document envisages principles and commitments of the governments on the gas pipeline construction);

- the commercial agreement on creation of the gas pipeline consortium (the document will be the basis for creation of the juridical company in the future for the commercial activities).

TANAP gas pipeline will be about 2,000 km long. It will start on the east of Turkey and will be laid to the Turkish-Bulgarian or Turkish-Greek border. Construction of the pipeline will start in quarter 4, 2014 and end in 36 months. At the first stage carrying capacity of the gas pipeline will total 16 billion cub.m.., at the second stage – 20 billion cub.m. and at the third stage it could grow up to 24 billion cub.m. a year.

Cost of the first stage of the pipeline construction is estimated at $7-8 billion.—0—