TODAY.AZ / Business

Azerbaijan takes step towards effective management of energy projects

19 March 2014 [11:50] - TODAY.AZ
A Closed Joint-Stock Company (CJSC) for the effective management of projects comprising Shah Deniz and delivery of gas to Europe will be officially registered in Azerbaijan in the near future, SOCAR (the State Oil Company of Azerbaijan) Vice-President for Economic Affairs Suleyman Gasimov told Trend on March 17.

Azerbaijani President Ilham Aliyev signed a decree on Feb. 25 establishing a Closed Joint-Stock Company (CJSC) for the effective management of projects within the second phase of the Shah Deniz gas and condensate field's development and expansion of the South Caucasus Pipeline, Trans-Anatolian Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).

The new company will be 51 percent state-owned and 49 percent owned by SOCAR with an authorised capital of $100 million.

SOCAR should also ensure the transfer of shares in projects to the newly created closed joint stock company (CJSC).

The State Oil Fund of Azerbaijan (SOFAZ) has been instructed to provide an equity financing for the CJSC, which is under direct state ownership. Funds to be provided to the company for financing the equity will provide a long term investment on return conditions.

At present, the process is ongoing with the formation of the new company that will actively participate in the implementation of projects both in Azerbaijan and beyond the country, according to Gasimov.

As SOFAZ Executive Director Shahmar Movsumov said earlier, the total volume of expenditure of the company will make up $5 billion. Some $2-2.5 billion is planned to be allocated for the provision of its activities for five years from the Oil Fund.

The consortium of the Azerbaijani Shah Deniz field development made the final investment decision (FID) on the second phase of offshore gas condensate field development on Dec. 17, 2013.

Gas within the second stage of development of the field will be exported to Turkey and the European markets by expanding the South Caucasus gas pipeline and construction of the Trans-Anatolian and Trans-Adriatic (TAP) gas pipelines.

Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas.

Development participants for the Shah Deniz field are SOCAR (the State Oil Company of Azerbaijan) with a share of 16.7 per cent, British BP (28.8 per cent), Norway's Statoil (15.5 per cent), Iran's NICO (10 per cent) , French Total (10 per cent), Russia's Lukoil (10 per cent) and Turkish TPAO (nine per cent).

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