Oil & Gas

4th Ministerial Meeting of Southern Gas Corridor Advisory Council


The Fourth Ministerial Meeting of the Southern Gas Corridor Advisory Council took place on February 15th in Baku. The main institutional, infrastructural and financial actors involved in the project attended the event and they confirmed the commitment to begin South Corridor’s operations by 2020 and its strategic connotation for Europe in terms of diversification of supplies and access to low-carbon energy sources.


The meeting was attended by: European Commission Vice-President for Energy Union Maros Sefcovic, Georgian First Deputy Prime Minister Dmitry Kumsishvili, Turkish Minister of Energy and Natural Resources Berat Albayrak, Bulgarian Energy Minister Temenuzhka Petkova, Italian Deputy Minister of Economic Development Ivan Scalfarotto, Representatives of Greek Ministry of the Environment, Energy and Climate Change Mikhail Verroiopolos, Ludovikos Kotsonopoulos, Albanian Deputy Minister of Infrastructure and Energy Enis Aliko, Acting Special Envoy and Coordinator for International Energy Affairs at the U.S. Department of State Sue Saarnio, British Prime Ministerial Trade Envoy for Azerbaijan Baroness Emma Nicholson, State Secretary of the Ministry of Economy of Montenegro Nikola Vujovic, Secretary of State at the Croatian Ministry of Environment and Energy Ivo Milatić, Advisory of Minister of Foreign Trade and Economic Relations of Bosnia and Herzegovina Nedo Kapetina, Advisor of Turkmen President Yagshygeldi Kakayev, Secretary of State at the Romanian Energy Ministry Iulian-Robert Tudorache, TANAP Director General Saltuk Duzyol, TAP CEO Luka Sueppati, BP regional president Gary Jones, as well as Snam, Enagas and Fluxys companies, Director of the Energy Division in the East Asia Department of the Asian Development Bank (ADB), Ashok Bhargava, Azerbaijan Country Director for the Asian Development Bank (ADB) Nariman Mannapbekov, Project officers Yagut Ertenliche and Sabina Jafarova, EBRD Managing Director for Eastern Europe and the Caucasus Francis Malige, EBRD Director for Caucasus, Moldova and Belarus Bruno Balvanera, EBRD Director of Natural Resources Eric Rasmussen, EBRD Director for Energy and Natural Resources, Russia, Caucasus and Central Asia Aida Sitdikova and Principal Banker Veronika Krakovich and Head of EBRD’s Resident Office in Baku Ivana Fernandes Duarte, AIB delegation led by Vice President Vazil Hudák, IFC Director for Europe & Central Asia Tomasz Telma, IFC Regional Manager for the South Caucasus Jan van Bilsen and IFC Country Representative for Azerbaijan Aliya Azimova, KfW CEO Klaus Michalak, Practice Manager of Europe and Central Asia, Energy and Extractives Global Practice of the World Bank Sameer Shukla, WO Task Team Leader Abdulaziz Faghi, the Country Manager for the WB Azerbaijan Office Naveed Hassan Naqvi, Multilateral Investment Guarantee Agency Director for Global Development Marcus Williams.

The Southern Gas Corridor, worth USD 41.5 billion, is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan’s Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans Anatolian Natural Gas Pipeline and Trans Adriatic Pipeline.

“The Southern Gas Corridor has a strategic importance for the European energy security, especially in the most vulnerable parts of Europe, such as South-East Europe and Southern Italy,” European Commission Vice-President for Energy Union Maros Sefcovic underlined.

 

TAP at a glance

The Trans Adriatic Pipeline (TAP) will transport Caspian natural gas to Europe.

Connecting with the Trans Anatolian Pipeline (TANAP) at the Greek-Turkish border, TAP will cross Northern Greece, Albania and the Adriatic Sea before coming ashore in Southern Italy to connect to the Italian natural gas network.

The project is currently in its construction phase, which started in 2016.

Once built, TAP will offer a direct and cost-effective transportation route opening up the vital Southern Gas Corridor, a 3500-kilometre long gas value chain stretching from the Caspian Sea to Europe.

TAP will start near Kipoi on the border of Turkey and Greece, where it will connect with the Trans Anatolian Pipeline (TANAP). From there, TAP will continue onshore, crossing the entire territory of Northern Greece, its longest stretch, then onwards east to west through Albania to the Adriatic coast.

The offshore section of the pipeline will begin near the Albanian city of Fier and it will traverse the Adriatic Sea to tie into Italy’s gas transportation network in Southern Italy.

TAP will be 878 kilometres in length (Greece 550 km; Albania 215 km; Adriatic Sea 105 km; Italy 8 km). Its highest point will be 1,800 metres in Albania’s mountains, while its lowest will be 820 metres beneath the sea.

TAP’s shareholders are: BP (20 percent), State Oil Company of Azerbaijan (20 percent), Snam (20 percent), Fluxys (19 percent), Enagas (16 percent) and Axpo (5 percent).

 

Financing the project

I’m glad to come to Baku with a positive message about the European Investment Bank (EIB) 1.5 billion euros loan for the construction of the Trans Adriatic Pipeline, which is the single biggest contribution of an international financial institution to this project,” European Commission Vice-President for Energy Union Maros Sefcovic underlined.

The European Bank for Reconstruction and Development (EBRD) plans to allocate loans worth up to 1.2 billion euros for the Trans-Adriatic Pipeline (TAP) in 2018, Bruno Balvanera, EBRD Director for the Caucasus, Moldova and Belarus, affirmed. “The amount expected will be in the range of up to 500 million euros in a direct loan and up to 700 million euros in a syndicated loan, subject to final internal approvals. It’s expected to be approved towards the middle of the year,” he added.

 

Romania’s first participation

Romania’s delegation, led by Iulian-Robert Tudorache, State Secretary within the Ministry of Energy, attended the event, to support the project, with the hope that part of the gas could also reach the future BRUA pipeline.

“It is Romania’s first participation in this annual event held in Baku, which marks the significant progress the project has made, particularly the inauguration of the TANAP segment in Turkey, expected this year,” the Ministry of Energy mentioned.

In his intervention, Iulian-Robert Tudorache assured the members of the Southern Gas Corridor Advisory Council of the constant support of our country for the implementation of this project and for its expansion plans.

Romania has proposed the inclusion in the future plans for the expansion of the Southern Corridor of the infrastructure offered by BRUA project, together with the interconnector between Romania and Bulgaria, for the transmission of natural gas from the Southern Corridor, on the Romanian territory, to Central Europe. The proposal comes to support the consolidation of the principle of diversification of gas supply routes and sources, as well as the important role of the Southern Corridor in increasing Europe’s energy security.

At the end of the meeting, Romania signed, with the other members, the text of the Ministerial Statement, in which, inter alia, Romania’s support for implementing the Southern Gas Corridor and its contribution to the connection of this project to Central Europe are recognized.

 

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