Southern Gas Corridor CJSC inks syndicated loan agreement under MIGA guarantee

By Trend

Azerbaijan’s Southern Gas Corridor CJSC has signed a syndicated loan agreement in the amount of $750 million under the guarantee of the Multilateral Investment Guarantee Agency (MIGA) to finance the Trans Anatolian Pipeline Natural Gas Pipeline (TANAP) project, said a message on the company’s website.

On June 29 of the current year, the loan and guarantee agreements were signed in relation to the syndicated loan facility to Southern Gas Corridor CJSC in the total amount of $750 mln ($500 million and EUR 215 million) backed with the guarantees of the Republic of Azerbaijan (sovereign guarantee) and MIGA for the purpose of financing TANAP project, which is part of the Southern Gas Corridor.

The sovereign guarantee agreement in relation to the mentioned loan agreement was signed by the Finance Minister Samir Sharifov on behalf of the Republic of Azerbaijan, and the loan agreement was signed by the General Director of SGC CJSC Afgan Isayev.

Afgan Isayev, the General Director of SGC CJSC, briefed on the work carried out within the framework of Southern Gas Corridor projects.

"The SGC project has been financially supported by the leading international financial institutions, and Phase-0 under TANAP project, which relates to the works required for the first commercial gas deliveries to Turkey, has already been completed. First commercial gas deliveries to Turkey has commenced today, on 30 June 2018. The works planned for the delivery of natural gas to Europe through Turkey in the near future are being carried out according to the schedule,” he said.

Isayev noted that overall progress in works in relation to the Stage 2 of the development of Shah Deniz gas-condensate field (SD2) and South Caucasus Pipeline Expansion project (SCPX) is 100 percent (for the first commercial gas deliveries), TANAP project – 94.8 percent and Trans Adriatic Pipeline (TAP) project – 74.6 percent.

“The construction work is successfully progressing. The total cost of SD2 project is currently estimated to be $22.7 billion ($17.8 billion spent as of the end of May 2018), SCPX project - US$4.5 billion (US$4.2 billion spent as of the end of May 2018), TANAP project - $8 billion ($5.5 billion spent as of the end of May 2018), and TAP project - 4.5 billion euros (3 billion euros spent as of the end of May 2018). SGC CJSC’s share of total project cost till 2020 inclusive is estimated at $11.4 billion, of which $9.1 billion (approximately 80 percent) had already been invested as of the end of May 2018,” he added.

A ceremony to launch Phase 0 of TANAP took place June 12 in the Turkish city of Eskisehir.

TANAP, together with Trans-Adriatic Pipeline (TAP), is a part of the Southern Gas Corridor, which provides for the transportation of gas from the Azerbaijani field Shah Deniz to Europe.

The initial capacity of TANAP is expected to be 16 billion cubic meters of gas per year. About six billion cubic meters will be supplied to Turkey, and the rest to Europe. After completion of the TAP, the gas will reach Europe in early 2020.

The share distribution in TANAP is as follows: Southern Gas Corridor CJSC - 51 percent, SOCAR Turkey Enerji - 7 percent, Botas - 30 percent, and BP - 12 percent.

The launching ceremony of the first stage of the Southern Gas Corridor project was held in Baku on May 29.

The gas from the Azerbaijani Shah Deniz field has already gone through the first segment of the Southern Gas Corridor - from the Sangachal terminal to the expanded South Caucasus Pipeline.

The Southern Gas Corridor, which costs more than $40 billion, is one of the priority projects for the EU and provides for the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region through Georgia and Turkey to Europe.