SOCAR: 'Overall costs of TAP project reduced'

Project is mainly financed by involving loans to reduce cost burden

Baku. 5 January. REPORT.AZ/ Processes in the world market don't impede the realization of Trans-Adriatic pipeline (TAP) project, constructed for transportation of natural gas produced from development of second phase of 'Shah Deniz' field to Europe.

Report was told in the State Oil Company of Azerbaijan Republic (SOCAR).

It was noted that as a result of decrease in oil prices, steel, main material for pipelines, has been got at a lower price in comparison with initial assessment: 'Prices of services involved to pipelines construction dropped due to decrease in oil prices and caused reduction of project's overall costs.'

'Possibilities are available for realization of TAP project directly through special means', SOCAR says.

'But the project is mainly financed by banks (export credit agencies, European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) and commercial banks), namely by involving loans to reduce cost burden. Loans will be paid on account of incomes from operation of pipeline by TAP shareholders and gas transportation. SOCAR is one of shareholders of the project. This format caused reduction of costs of Azerbaijan that is participant of the project (SGC-SOCAR). We expect above-mentioned positive effects in other projects of the Southern Gas Corridor, too', SOCAR says.

TAP pipeline, which is a part of the Southern Gas Corridor, is initially planned to deliver 10 billion m3 of gas per year to Europe. On the territory of Kipoi at the Turkish-Greek border, pipeline will be linked to the Trans-Anatolian pipeline (TANAP) and run through Greece, Albania and the bottom of the Adriatic Sea to southern Italy. First supplies of Azerbaijani gas from Shah Deniz are planned for the end of 2019 - early 2020. The length of the pipeline is 878 km, 545 km of which will run on the territory of Greece, 215 km in Albania, 105 km on the bottom of the Adriatic Sea, 8 km in Southern Italy. The highest point of the pipeline will be located in the mountains of Albania (1800 m), the lowest - in the bottom of the sea (820 m). We are carrying out preparatory work for construction of TAP. Start of constructing the pipeline is scheduled to this year.

BP, SOCAR and Snam S.p.A. control 20% of TAP each, Fluxys- 19%, Enagás - 16% and Axpo - 5%.

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