Azerbaijan has signed a memorandum of understanding on future gas supplies to Albania, Croatia and Montenegro.
Gas will be supplied as part of the Southern Gas Corridor - a project that will allow Europe to diversify its hydrocarbon source supply and increase energy security, while Azerbaijan continues to buy a new market in the face of Europe.
The Southern Gas Corridor is a large project, to meet European gas needs for the next few decades.
Gas to be produced during the second phase of the Azerbaijani Shah Deniz field development is considered as the main source for the Southern Gas Corridor project. A consortium of Azerbaijani Shah Deniz gas condensate field development announced its choice as being the TAP project in late June as a gas transportation route to the European markets.
The signing ceremony of the final investment decision on the Shah Deniz-2 project has started in Baku today.
The Shah Deniz-2 project authorisation means the transition of the project from the concept into an immediate implementation stage.
Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas.
The cost of the second phase of development of the Shah Deniz gas condensate field is estimated at $25 billion.
Within the second phase of development it is planned to produce some 16 billion cubic meters of gas whereas within the first phase it will be nine billion, six billion of which will be transported to Turkey and 10 billion to Europe.