The Trans Anatolian Pipeline (TANAP) that will carry gas from
Azerbaijan’s massive Shah Deniz 2 field is of strategic nature for
Turkey and Europe.
"TANAP is important Project not only for Turkey but also for
Southeast Europe,” an ex-CEO of Turkey’s Botas, Gokhan Yardim, told New
Europe from Ankara, adding that Russia’s Turkish Stream project is also
important.
"Russia and Azerbaijan are two reliable gas partners for many years
and Turkey has good relations for many years,” Yardim said, adding that
10 billion cubic metres of Russian gas and 1.3 billion cubic metres of
Azeri gas are being delivered to Turkish private importers so these gas
supplies are the basis of Turkish liberal gas market.
Meanwhile in cloudy Baku, energy is also a strategic priority.
Gulmira Rzayeva, a senior research fellow at Azerbaijan’s Centre for
Strategic Studies (SAM), told New Europe, "thus far the Azeri natural
gas price is the cheapest among the Turkey’s gas suppliers gas.
Consequently it is competitive”. The 6 billion cubic metres of Shah
Deniz 2 gas has been already contracted with Turkey’s Botas. "What will
be the price at the moment when gas will flow to the Turkish market in
2018 is not known at the moment. However, as the gas price formula is
linked to the oil price and given the current low price environment,
which most likely to maintain in next two-three years, I assumed that
the Shah Deniz 2 price for Botas will be lower than Shah Deniz 1 gas
price and quite competitive,” Rzayeva said.
The $10-billion TANAP project envisages transportation of Azeri gas
from the Georgian-Turkish border to the western border of Turkey. The
initial capacity of TANAP is expected to reach 16 billion cubic metres
per year. Around 6 billion cubic metres will be delivered to Turkey and
the rest will be supplied to Europe.
Turkey will get gas in 2018 and after the Trans-Adriatic Pipeline
(TAP) is completed, it will be delivered to Europe in early 2020.
Rzayeva said the TAP project is going according to schedule and no
delay is expected. "According to TAP press releases tender for
construction works and pipe supplies have been announced, so I think we
should see the pipeline in place in the set schedule,” she said.
In April, Shah Deniz-operator BP became one of the TANAP shareholders
with a 12% share. The other shareholders of TANAP are: Azeri state oil
company SOCAR (58%) and Botas (30%).
Rzayeva noted that it is a challenging time now for energy majors to
develop upstream and also invest in midstream and downstream projects
given current low oil and gas prices. Final investment decisions for new
projects that could bring new gas volumes from alternative sources to
the European market either may be delayed or postponed, she added.
The Shah Deniz gas is in advantageous position as they have secured
all the necessary binding agreements, Rzayeva said. It seems that Shah
Deniz 2 gas is the only firm alternative for the EU at the moment. "I
think this is the main significance of the Azeri gas,” Rzayeva said.
by Kostis Geropoulos - Energy & Russian Affairs
Editor, New Europe
http://neurope.eu/article/tanap-key-eu-conduit-for-azeri-gas/