The state oil company of the Azeri Republic (SOCAR) began talks in Athens at the beginning of this week with Greece’s state owned Public Gas Corporation (DEPA) on exports of gas from the Shakh Deniz field to Europe through Turkey and Greece, the Russian agency Interfax reported, quoting a SOCAR source.
SOCAR President Natik Aliyev and first vice president Ilkham Aliyev are taking part in the talks on the Azeri side. Greek sources indicate that the talks will be concluded before the end of this week.
According to SOCAR information, during the talks the sides will discuss routes for the export of Azeri gas to Europe proposed by the Greek side, in addition to volumes and tariffs.
Earlier, the SOCAR president anounced that “the Turkish market is not able to take all the gas that will be produced at Shakh Deniz. Therefore, SOCAR and management from BP (the operator of the project) are interested in finding new gas markets.”
The cost of the Shakh Deniz project (including the construction of the Baku-Tbilisi-Erzurum pipeline) amounts to $3.2 billion. Phase one of the project involves annual production of 8.1 billion cubic meters of gas from 2006.
The Shakh-Deniz field is located 100 kilometers southeast of Azerbaijan’s capital Baku. The contract for the development of the field was signed in June 1996 and ratified in October 1996. Forecast reserves at the field amount to about 1 trillion cubic meters of gas and 400 million tons of gas condensate.
Participants in the project include SOCAR (10 percent) British Petroleum (25.5 percent), Norway’s Statoil (25.5 percent), Russian-Italian joint venture LUKAgip (10 percent), France’s TotalFinaElf (10 percent), Iran’s OIEC (10 percent) and Turkey’s TPAO (9 percent).
Currently Greece imports approx 2.0 BCM’s of natural gas mainly from Russia, via pipeline through Bulgaria, and a small guantity of LNG from Algeria.
DEPA recently signed agreements with Iran and Kazakstan for the importation of natural gas via pipeline through Tyrkey.
An agreement for the construction of the necessary pipelines has already been signed with Turkish state oil and gas company BOTAS.