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Southern Gas Corridor To Remain Active for 50-60 Years

The revenues of Shah Deniz -2 and Southern Gas Corridor projects will exceed the expenditures by 2028-2030, Azerbaijan’s Energy Minister Natig Aliyev said in an interview with Natural Gas Europe.

Azerbaijan eyes Shah Deniz, TANAP and TAP as a united project, he added.

“The capital expenditure on Shah Deniz -2 project is estimated at $20 billion and Southern Gas Corridor at $25 billion,” said the minister. “We would start gas export to Turkey (from Shah Deniz -2) in 2018 and to EU in 2020.”

“Based on the production-sharing contract, some of the costs will be clawed back annually from the produced gas until 2020,” said Aliyev. “On the other hand, alongside with the 16 billion cubic meters of natural gas, there are more than 29 million barrels of gas condensate from Shah Deniz -2. This will be shipped through the Baku-Tbilisi-Ceyhan pipeline.”

The natural gas and gas condensate production level of Shah Deniz -1 is about 10 billion cubic meters and 16.4 million barrels annually, said the energy minister.

He noted that the Southern Gas Corridor is projected to remain active for 50-60 years.

The Southern Gas Corridor is one of the priority energy projects for EU. It envisages the transportation of gas from the Caspian Sea 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