Southern Gas Corridor: TANAP Poised to Open on June 30

The Trans Anatolian Pipeline (TANAP) has been completed by 93.5% and the first Azeri gas is going to start flowing via the second leg of the Southern Gas Corridor (SGC) pipe network on June 30, General Manager Saltuk Duzyol said last week. According to Mr. Duzyol, first test gas was pumped into TANAP on January 23. At peak time of construction works, around 13,000 people were involved in the project implementation, while at the moment some 7,000 workers still remain at the site. The cost of the project was initially estimated at $11.7bn, but successful procurement, project management and financial management brought the aforementioned figure down to $7.99bn. TANAP was granted $3.75bn in loans by international financial institutions and a total of $10.2M by the EU. An 80% of pipes were produced in Turkey and another 20% in China, Mr. Duzyol concluded.

The 1,850km-long pipeline, owned by the SGC CJSC (51%), BOTAS (30%), BP (12%) and the Turkish subsidiary of SOCAR (7%), and extending from the Georgian-Turkish all the way up to the Turkish-Greek border, where it will connect to the Trans Adriatic Pipeline (TAP), will achieve its 6BCM/a plateau by 2020. At the current primary stage, 2BCM are going to be delivered via the South Caucasus Pipeline Expansion (SCPX) and TANAP, rising to 4BCM in 2019. Both the SCPX and TANAP capacities are expected to increase up to 23-31BCM/a by 2023-2026 with hopes that more sources of gas, beyond the Shah Deniz (SD) Phase 2, will be made available from Azerbaijan, Turkmenistan, Iran and Iraq. In order for this to happen, investment decisions will have to be taken for the construction of 5 additional compressors, raising their total number to 7, General Manager Duzyol stated. Whether more international financial support for these extra stations will be attracted is yet to be seen. Nevertheless, getting TANAP fully filled will help create a higher netback margin for the consortia engaged in the project, as a result of the short transportation distance through Turkey, who also has to offer a natural gas price environment close to the EU average.

Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-april-27-2018/#3