Implementation of Shah Deniz -2 in Azerbaijan depends on gas transit via Turkey: StatoilHydro Azerbaijan

"The time of development of the field is not so important at the moment. The time frame of the development is not discussed at the moment. It can be discussed only after the issue of gas transit via Turkey is solved. The important is the supply of gas to Europe," Skalmeras said.

Azerbaijani Industry and Energy Minister Natig Aliyev said the Shah-Deniz-2 project costs $16-$20 billion according to various estimations.

The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. The sides to the contract are ?? (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%). Field's reserves are estimated at 1.2 trillion cubic meters of gas. The daily production is 22 million cubic meters. The daily production will reach 27 million cubic meters soon due to launch of new well.

The gas production on this field began in December 2006. At present gas is transported to Georgia and Turkey via South Caucasus Pipeline. Azerbaijan is also a buyer of gas. The gas is exported via the Baku-Tbilisi-Erzurum gas pipeline.

Gas output from Shah Deniz is expected to reach 9 billion cubic meters in 2009 compared to 8.6 billion cubic meters last year. The gas will be sold to Azerbaijan, Georgia and Turkey under previously signed agreements. Within the framework of Stage Two of the project after 2014, production will increase to 20 billion cubic meters.

/Trend Capital/