BAKU – Azerbaijan’s Sangachal, one of the world's largest oil and gas terminals on the coast of the Caspian Sea, is an impressive site. Located 45 kilometres south of Baku, Sangachal is fully operational and natural gas from Azerbaijan’s massive Shah Deniz field is already sold from there. The terminal will also be expanded to receive gas from the second phase of Shah Deniz.
On 28 June, the Shah Deniz II consortium, led by BP and Statoil, selected the Nabucco West pipeline for one of two possible routes to carry Caspian gas to western Europe, BP and Azeri state oil and gas company SOCAR said.
Two days earlier, Turkey and Azerbaijan signed a contract for the construction of the Trans-Anatolian gas pipeline (TANAP). Some experts believe that TANAP may be later connected to the reconfigured Nabucco West, which envisages the transportation of Azeri gas from Turkish-Bulgarian border to Austria’s Baumgarten.
Next year, Shah Deniz II is expected to decide on the entire route for its gas and whether it wants the last stage of the journey to take a southern route through Italy via the Trans-Adriatic Pipeline (TAP) or a more northern route into Austria via Nabucco West.
On 29 June, in a speech at the Crans Montana Forum in Baku, Azerbaijan’s President Ilham Aliyev told a full-auditorium at the Heydar Aliyev Center that the agreement between Azerbaijan and Turkey to build TANAP “is one of the most important of our energy policy”.
SOCAR Vice President Elshad Nassirov told New Europe at the same venue that “Nabucco Classic” started at the Georgian-Turkish border and the size and the finance needed for that pipeline was not corresponding to the production. “Therefore TANAP is a shorter or smaller version of the transportation across Turkey. So if production was not ready to transport gas through the Nabucco Classic for its value, cost and transportation tariff, then [Turkey’s] Botas transportation system was not ready to immediately take our gas to the western Turkish border, from this point of view, of course, TANAP could be considered as a breakthrough because it’s the first real transportation deal which is connecting the production and the consumption,” Nassirov said.
Nassirov reminded that Azerbaijan and Turkey signed a memorandum of understanding on TANAP on 26 December. But now three documents were signed: An agreement between SOCAR and Botas about their participation, an inter-governmental agreement and host governmental agreement. He expressed the hope that the latter two important agreements will be ratified by the Turkish Parliament. “These documents are, from the point of view of protection of investments, stronger than the IGA [inter-governmental agreement] for Nabucco,” he said.
Asked if SOCAR prefers TAP or Nabucco, Nassirov said they have different markets. He added that SOCAR and the government of Azerbaijan need to stay neutral noting that, according to the production sharing agreement ratified by the parliament, the producers or the investors will decide which is the most effective, commercial and profitable route. Moreover, the government doesn’t want to interfere in order not to insult the governments of those countries which will be excluded from the transportation,” Nassirov said. For now, the focus will be on Shah Deniz and the Sangachal Terminal.
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