EaP News & Events

Azerbaijan: final investment decision to extract gas pledged for Europe - real breakthrough

December 18, 2013

The European Commission has welcomed yesterday’s final investment decision (FID) on extracting gas from the Shah Deniz II gas field in Azerbaijan that will see Europe getting 10 billion cubics metres (bcm) per year starting from end 2019. All decisions taken so far - including to choose the Trans-Adriatic Pipeline (TAP) as the pipeline to bring gas to Europe - were conditional on this final investment decision, a press release said.
 
EU Commission President José Manuel Barroso called the decision “a strategic door opener for stronger European energy security”, and “a major milestone for the diversification of our energy supplies, to the benefit of European consumers and businesses."
 
This decision to open the Southern Gas Corridor “is a real breakthrough,” EU Energy Commissioner Günther Oettinger said, adding: “Through its further enlargement, the corridor will have the potential to meet up to 20 per cent of the EU’s gas needs in the long term.”
 
An official signing ceremony was held in Baku on Monday in the presence of Azerbaijan's President Ilham Aliyev, EU Energy Commissioner Günther Oettinger and others. More than €18 billion will be invested in platforms and subsea wells to extract 16 bcm of gas in water depths of 500 meters in the Caspian sea. Following earlier agreements, starting from the end of 2019 6 bcm will be delivered to Turkey, and 10 bcm to Europe.
 
The decision taken today was decisive - as all agreements and intents made before were conditional on the FID.
 
In June 2013, the Shah-Deniz-II-Consortium, which holds the licence to extract the gas from the gas field, had chosen the Trans-Adriatic Pipeline (TAP) to bring the gas from the Turkish border via Greece and Albania to Italy.
 
It had also been decided earlier that the gas will be shipped via the upgraded "South Caucasus Pipeline" through Georgia and via TANAP, a completely new 2000-km-long-pipeline, through Turkey until its Western borders. SOCAR (Azerbaijan) is the main shareholder of the TANAP pipeline.
 
Investment costs of building and upgrading of all the pipelines and the development of the gas field will be around €30 billion.(EU Neighbourhood Info) 
 
Read more
 
Press release 
 
EU Neighbourhood Info Centre webpage Press Pack (NEW) - Meeting the energy challenge: EU cooperation with its Eastern Neighbours (17-12-2013)
 
 
EU Neighbourhood Info Centre webpage - Energy tops agenda as Azerbaijan president visits Brussels (21-06-2013)
 
European Commission - Energy cooperation with South Caucasus
 
ENP Country Progress Report 2012 – Azerbaijan 
 
EU Neighbourhood Info Centre webpage – Azerbaijan   

    


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