“One year has already passed since the time of the final investment decision on the development project of the second phase of Shah Deniz Azerbaijani gas condensate field,” said Birrell. “I can say that during this time the project has considerably advanced. Until today, we have signed contracts worth a total of $10 billion. Basically, these are contracts for construction. Decisions on contractors in the construction work were made. These contracts give us the opportunity to begin the construction. Now employment, mostly of the citizens of Azerbaijan is going on.”

He said that work to expand the Sangachal terminal within the project of the Southern Gas Corridor has already begun. “Azerbaijan receives all the necessary materials for the construction of the pipeline,” said Birrell. “With the help of the government of Azerbaijan, we acquired 200 kilometers of territory, necessary for the construction, established the points at which the pipes will be stored. I can say that thanks to the support of the state and SOCAR, all work will be completed on time and within the planned budget. The first gas will go to Turkey on schedule – in late 2018, and gas will reach Europe a year later – in late 2019.”

The TANAP project envisages gas transportation from Azerbaijan’s Shah Deniz field to Europe through Turkey.

The initial capacity of TANAP is expected to reach 16 billion cubic meters of gas per year.

Around six billion cubic meters of the total volume of gas to be produced as part of the Stage 2 of development of the Shah Deniz field will be delivered to Turkey and 10 billion cubic meters to Europe per year. In the future, capacity of the pipeline can be increased to 31 billion cubic meters.

It is planned to commission TANAP in 2018. The project’s cost is estimated at $10-11 billion.

Currently, SOCAR legally holds 70 percent of share in the TANAP project, while Turkey’s Botas owns 30 percent share. The procedure of legal execution of the transaction on purchasing 12 percent of SOCAR’s share in the TANAP project by BP will be completed by late 2014.

Subsequently, the shareholders of the TANAP will be as follows: SOCAR – 58 percent, Botas – 30 percent and BP – 12 percent.

The TAP project was selected by the consortium of Azerbaijani Shah Deniz field development as the transportation route to the European markets. The approximately 870 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

Construction of TAP is planned to begin in 2016. The initial capacity of the pipeline will be 10 billion cubic meters per year, but it can easily be expanded to 20 billion cubic meters per year.

The contract for development of the Shah Deniz offshore field, which has proven reserve of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

About 9.8 billion cubic meters of gas and 2.48 million metric tons of condensate (19.6 million barrels) were produced at the Shah Deniz field in 2013, compared to 7.73 billion cubic meters of gas and 2 million metric tons of condensate in 2012.

The shareholders are: BP, operator (28.8 percent), Statoil (15.5 percent), NICO (10 percent), Total (10 percent), Lukoil (10 percent), TPAO (9 percent) and SOCAR (16.7 percent). These percentages include the recent purchases of equity from Statoil by BP and SOCAR.

Earlier, Total has entered into an agreement to sell its interest in Shah Deniz to TPAO. After the transaction is over, the share of the latter in the project will be 19 percent.

Moreover, Norway’s Statoil company has sold its 15.5-percent share in the Shah Deniz project to the Malaysian oil and gas company Petronas. The transactions on the sale and purchase of the shares haven’t been completed yet.

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