Shah Deniz: A Step Closer To Relieving Eastern Europe

BMI View: With the pipelines chosen and the gas sales agreements in place, BP are now poised to imminently take the final investment decision on the Shah Deniz Stage 2 project. This development w ill open the Southern Gas Corridor transporting Azeri gas to Europe providing a new source of gas to the region. While the project is only set to bring in 10bcm of new gas supplies it is expected to have a substantial impact on diluting Russia's current dominance in the region and could hinder the progression of the South Stream pipeline .

Shah Deniz is among the top twenty largest non-associated gas fields in the world with 1 trillion cubic metres of gas in place. BP operate the field and currently produce around 9bn cubic metres (bcm) a year, as well as 50,000 barrels per day (b/d) of condensate from Stage 1 of the Shah Deniz development. Currently, the gas is sold domestically, with exports to Georgia and Turkey. The field has considerably more production scope and will be a critical resource in diversifying European, and in particular Eastern European, gas supplies from the dominance of Russia.

Stage 2 development of the vast Shah Deniz field in Azerbaijan, took a step closer to final investment decision (FID) after a major sales agreement was struck. Stage 2 of the Shah Deniz project would open up the Southern Gas Corridor, bringing Azeri gas to Europe via the Trans- Anatolian Pipeline (TANAP) from Azerbaijan to Greece, and the Trans -Adriatic Pipeline (TAP) from Greece to Italy. Current plans for the TANAP pipeline capacity set it at 1 6 bn cubic metres (bcm), of which an agreement to sell 6bcm was made with Turkish company BOTAS in 2011 . The TAP pipeline is expected to have a capacity of 10bcm, but according to the consortium leading the pipeline ' s development , c apacity could be quickly expanded to 20bcm annually should supply and demand justify.

Azeri Gas To TAP Into Italy
Southern Corridor Pipeline Route

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This article is tagged to:
Sector: Infrastructure, Power
Geography: Azerbaijan, Bulgaria, Greece, Croatia, Italy, Romania, Russia, Turkey

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