Spare capacity of Southern Gas Corridor revealed

Some sections of the Southern Gas Corridor (SGC) can currently handle a little more gas, Report informs, citing the Natural Gas World.

There is perhaps 4-5 bcma of spare capacity on the sections from Azerbaijan to Turkiye, but precious little thereafter.

The EU-Azerbaijan MOU of July 2022 to take exports from the current 12 bcma to 20 bcma will require investment in compressors and, perhaps, some parallel pipelining (looping).

The costs remain unknown but can be reckoned in billions of dollars or euros. TAP has already announced market test plans for 2023 to see whether suppliers are prepared to commit volumes for throughput that would justify the expansion costs.

On production, Azerbaijan has a long list of potential offshore gas developments: Apsheron, ACG Deep, Shah Deniz Stage 3, Shafag Asiman, and Socar’s Umid/Babek. At present, the only ones actually proceeding are Socar’s own Umid block, which is already producing at around 1-2 bcma, and the 1.5 bcma Apsheron Stage 1, although Socar sources say that discussions with Apsheron’s operator, France’s Total, for full field agreement are very close to completion and that an agreement could be concluded early in 2023. If so, this should add 3 bcma to Azerbaijani export-focused output in or around 2026.

All the others require either further exploration or a development plan and project commitment—in other words, a final investment decision (FID). Eventually—there is no clear timeframe—Socar hopes to produce up to 5 bcma from its Babek field while Socar sources say discussions on ACG Deep are “on track” and that the field, considered capable of producing up to 5 bcma, could start to come on stream in 2027-28. BP, the operator, is engaged in discussions with Socar on enhancing production at Shah Deniz, but there is no indication concerning either the volumes or timeframe for any increase in output.