American gas to compete with Azerbaijan's blue fuel in Europe, expert says

/By Azernews/

By Aynur Karimova

Europe is interested in supplying the U.S. natural gas, but this gas will have a lot of competitors, including Azerbaijan's Southern Gas Corridor project.

This was stated by Valeriy Nesterov, the senior analyst of the Russian Sberbank CIB, who was commenting on the decision of the World Bank to allocate $1 billion to the construction of the Trans-Anatolian Pipeline (TANAP).

"There is no doubt that the Southern Gas Corridor project will be implemented consistently. The production capacity is sufficient - the second stage of development of the Shah Deniz field. There is a pipe expansion project. There is economic, political and strategic interest of the transit countries, first of all of Turkey," he told Moscow-Baku portal.

The expert further stated that TANAP is enjoying and will continue to enjoy the support of all participating states and the EU.

"We know what efforts are made - not only for economic reasons - to limit the share of Gazprom in the European market. Therefore, the World Bank's decision was expected. I think the project will be implemented in accordance with the schedule," he added.

TANAP is designed to transport Azerbaijani gas to the European markets as part of the Southern Gas Corridor. The TANAP pipeline project envisages transporting Azerbaijani Shah Deniz gas from the Georgian-Turkish border to the western border of Turkey.

Shah Deniz gas will be supplied to Turkey in 2018, and after the completion of the Trans Adriatic Pipeline, the Azerbaijani gas will be transported to Europe roughly at the beginning of 2020.

SOCAR owns 58 percent stake in TANAP project while Botas and BP have 30 and 12 percent stakes, respectively.

Nesterov believes that today, the importance of the project is increasing.

"On the other side, Western Europe understands that there is a need for new sources of supply besides Russia, Algeria, Qatar and Norway. Today, the EU wishes to receive the U.S. gas. Most importantly, it is clear that not only the Azerbaijani gas becomes the rival for it. A lot of efforts are being made to ensure the supply of gas from Turkmenistan and now Iran to southern Europe," he said, adding that the number of potential sources of gas supply is increasing.

In this regard, he believes, the capacity of TANAP can be boosted in the future.

The Southern Gas Corridor project, aiming to bring the Caspian gas to Europe, is one of the biggest construction projects of our time.

This project envisages the transportation of the gas extracted at the giant Shah Deniz field in the Azerbaijani section of the Caspian Sea. Shah Deniz Stage 2 gas will make a 3,500 kilometer journey from the Caspian Sea into Europe. This requires upgrading the existing infrastructure and the development of a chain of new pipelines.

The existing South Caucasus Pipeline will be expanded with a new parallel pipeline across Azerbaijan and Georgia, while TANAP will transport Shah Deniz gas across Turkey to join the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The first gas supplies through the corridor to Georgia and Turkey are given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first gas is produced offshore in Azerbaijan.

Fitch Ratings predicted that the Southern Gas Corridor project’s net financial needs for operations and capex will be close to $8.4 billion in 2016-2019.