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Final investment agreement on Shah Deniz-2 signed - UPDATED

Final investment agreement on Shah Deniz-2 signed - <span style="color: red;">UPDATED

17 December 2013 08:37 (UTC +04:00)

APA-Economics reports that the document was signed by President of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev and BP's Regional President for Azerbaijan, Georgia and Turkey Gordon Birrell.

Memorandum was also signed on Sourthern Gas Corridor.

The Memorandum was signed by economy ministers of Albania, Croatia and Montenegro and Azerbaijan’s Minister of Energy Natig Aliyev.

On June 28, Azerbaijan officially announced the selection of the Trans Adriatic Pipeline (TAP) for natural gas deliveries to Europe. TAP pipeline will deliver Azerbaijan’s gas to Italy through Turkey, Greece and Albania. Total cost of the project is approximately $2.2bn.

The Shah Deniz field was discovered in 1999. Azerbaijan has been exporting gas to Georgia and Turkey since 2006 from the Shah Deniz stage 1 development.

Coincident with the FID, SOCAR purchased 6.7 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil, and BP purchased 3.3 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil. Both of these transactions are subject to conditions that are expected to be satisfied in 2014.

The Shah Deniz co-venturers are (after acquisitions): BP, operator (28.8 per cent), SOCAR (16.7 per cent), Statoil (15.5 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent).

These percentages include the above-described purchases of equity from Statoil by BP and SOCAR, respectively, which are subject to conditions that are expected to be satisfied in 2014 for completion of the transactions.

The TANAP partners are expected to be: SOCAR, operator (68 per cent), BOTAS (20 per cent) and BP (12 per cent) following the purchase of TANAP interests by BOTAS and BP that are expected to be completed in 2014.

The TAP partners are: SOCAR (20 per cent), BP (20 per cent), Statoil (20 per cent), Fluxys (16 per cent), Total (10 per cent), E.ON (9 per cent) and Axpo (5 per cent).